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The Natural Rate of Unemployment over the Past 100 Years

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Abstract

The natural rate of unemployment, or u-star, is used by economists and policymakers to help assess the overall state of the labor market. However, the natural rate is not directly observable and must be estimated. A new statistical approach estimates the natural rate over the past 100 years. Results suggest the natural rate has been remarkably stable over history, hovering between 4.5 and 5.5% for long periods, even during the Great Depression. Recent readings on the unemployment rate have been running slightly below the natural rate estimate.

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  • Régis Barnichon & Christian Matthes, 2017. "The Natural Rate of Unemployment over the Past 100 Years," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfel:00138
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Navigating in Cloudy Skies
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2018-12-10 12:14:25

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    Cited by:

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    2. Janet L. Yellen, 2017. "Inflation, Uncertainty, and Monetary Policy : a speech at the \"Prospects for Growth: Reassessing the Fundamentals\" 59th Annual Meeting of the National Association for Business Economics, C," Speech 971, Board of Governors of the Federal Reserve System (U.S.).
    3. Glick, Reuven, 2020. "r* and the global economy," Journal of International Money and Finance, Elsevier, vol. 102(C).

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