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Measuring the NAIRU in the Spanish Economy

Author

Listed:
  • Ángel Estrada

    (Banco de España)

  • Ignacio Hernando

    (Banco de España)

  • J. David López-Salido

    (Banco de España)

Abstract

This paper addresses the issue of measuring the NAIRU in the Spanish economy. We implement some of the procedures proposed in the literature to estimate the NAIRU, describing their advantages and disadvantages. Our analysis shows that these alternative approaches provide significantly different point estimates of the NAIRU. Moreover, whenever some measures of the precision of the estimate are available, the degree of uncertainty is remarkable. Thus, our main conclusion is that the usefulness of the NAIRU concept as a general guideline for discussing and analyzing macroeconomic policy is very limited, given the current state of economic research on this area.

Suggested Citation

  • Ángel Estrada & Ignacio Hernando & J. David López-Salido, 2000. "Measuring the NAIRU in the Spanish Economy," Working Papers 0009, Banco de España;Working Papers Homepage.
  • Handle: RePEc:bde:wpaper:0009
    as

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    File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/00/Fic/dt0009e.pdf
    File Function: First version, 2000
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Emilie Jašová & Božena Kaderábková, 2012. "Comparing NAIRU and Economic Cycle from the Perspective of Labour Market in the Countries of the Visegrad Group," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 3-23.
    2. repec:iab:iabmit:v:36:i:4:p:411-427 is not listed on IDEAS
    3. Emilie Jasova, 2014. "A Model for Estimation of NAIRU Extended by Demand Shocks and its Application to Business Cycle Analysis in the Labour Market in Hungary and Poland," Proceedings of Economics and Finance Conferences 0401788, International Institute of Social and Economic Sciences.
    4. Gruener Hans Peter & Hayo Bernd & Hefeker Carsten, 2009. "Unions, Wage Setting and Monetary Policy Uncertainty," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-25, October.
    5. Beissinger, Thomas, 2003. "Strukturelle Arbeitslosigkeit in Europa: Eine Bestandsaufnahme," University of Regensburg Working Papers in Business, Economics and Management Information Systems 389, University of Regensburg, Department of Economics.
    6. Constantina Kottaridi & Diego Méndez-Carbajo & Dimitrios D. Thomakos, 2007. "Inflation Dynamics and the Cross-Sectional Distribution of Prices in the E.U. Periphery," Working Paper series 43_07, Rimini Centre for Economic Analysis.
    7. Božena Kadeřábková & Emilie Jašová, 2011. "Analýza ukazatele NAIRU na sektorové úrovni
      [Analysis of the Indicator NAIRU on the Sector Level]
      ," Politická ekonomie, University of Economics, Prague, vol. 2011(4), pages 508-525.
    8. Juncal Cunnado & Fernando PErez De Gracia, 2003. "Sacrifice Ratios: Some lessons from EMU countries, 1960-2001," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(3), pages 327-337.
    9. Albert van der Horst, 2003. "Structural estimates of equilibrium unemployment in six OECD economies," CPB Discussion Paper 19, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Beissinger, Thomas, 2003. "Strukturelle Arbeitslosigkeit in Europa : eine Bestandsaufnahme (Structural unemployment in Europe * an inventory)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 411-427.
    11. José Francisco Bellod Redondo, 2011. "La función de producción de Cobb-Douglas y la economía española," Revista de Economía Crítica, Asociación de Economía Crítica, vol. 12, pages 9-38.
    12. Ravi Balakrishnan, 2001. "The interaction of firing costs and on-the-job search: an application of a search theoretic model to the Spanish labour market," Working Papers 0102, Banco de España;Working Papers Homepage.
    13. Willman, Alpo & Estrada, Ángel, 2002. "The Spanish block of the ESCB-multi-country model," Working Paper Series 0149, European Central Bank.
    14. Emilie Jašová & Božena Kadeřábková & Klára Čermáková & Pavel Procházka, 2016. "Působení institucionálních faktorů na strukturální a cyklickou nezaměstnanost v zemích Visegrádské skupiny
      [Influence of Institutional Factors on Structural and Cyclical Unemployment in the Countri
      ," Politická ekonomie, University of Economics, Prague, vol. 2016(1), pages 34-50.

    More about this item

    Keywords

    macroeconomics; unemployment; taxes; prices; wages;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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