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Structural Determinants of the Natural Rate of Unemployment in Canada

Author

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  • Coe, David T.

Abstract

This paper presents empirical estimates of the policy and structural determinants of the natural rate of unemployment in Canada. The paper begins with a discussion of structural features of the economy which impinge on the adjustment of real wages to their equilibrium level. Estimates are presented showing how the generosity of the unemployment insurance system is related to past levels of unemployment. The empirical results indicate that government policies have been largely responsible for changes in the natrual rate, and hence can contribute to a reduction in the natural rate in the medium term.

Suggested Citation

  • Coe, David T., 1989. "Structural Determinants of the Natural Rate of Unemployment in Canada," MPRA Paper 8623, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8623
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    File URL: https://mpra.ub.uni-muenchen.de/8623/1/MPRA_paper_8623.pdf
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    References listed on IDEAS

    as
    1. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Chapters,in: NBER Macroeconomics Annual 1986, Volume 1, pages 15-90 National Bureau of Economic Research, Inc.
    2. Lindbeck, Assar & Snower, Dennis J, 1988. "Cooperation, Harassment, and Involuntary Unemployment: An Insider-Outsider Approach," American Economic Review, American Economic Association, vol. 78(1), pages 167-188, March.
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    Citations

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    Cited by:

    1. Stephen S. Poloz, "undated". "The Causes of Unemployment in Canada: A Review of the Evidence," Staff Working Papers 94-11, Bank of Canada.
    2. Charles Adams & David T. Coe, 1990. "A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States," IMF Staff Papers, Palgrave Macmillan, vol. 37(2), pages 232-293, June.
    3. Stephen S. Poloz, 1995. "The Causes of Unemployment in Canada: A Review of the Evidence," Macroeconomics 9502002, EconWPA.
    4. Pichette, Lise, 1998. "La politique monétaire a-t-elle des effets asymétriques sur l'emploi?," Staff Working Papers 98-17, Bank of Canada.
    5. Dixon, Robert & Lim, Guay C. & van Ours, Jan C., 2016. "Revisiting Okun's Relationship," CEPR Discussion Papers 11184, C.E.P.R. Discussion Papers.
    6. Robert A. Amano & Tony S. Wirjanto, "undated". "An Empirical Investigation into Government Spending and Private Sector Behaviour," Staff Working Papers 94-8, Bank of Canada.
    7. Victor Claar, 2006. "Is the NAIRU more useful in forecasting inflation than the natural rate of unemployment?," Applied Economics, Taylor & Francis Journals, vol. 38(18), pages 2179-2189.
    8. Cote, D. & Hostland, D., 1996. "An Econometric Examination of the Trend Unemployment Rate in Canada," Staff Working Papers 96-7, Bank of Canada.
    9. Beatriz Rodríguez Prado, 1995. "La tasa natural de desempleo en la economía española: un intento de cuantificación," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 3, pages 133-151, Junio.
    10. Cousineau, Jean-Michel, 1991. "L’effet du salaire minimum sur le chômage des jeunes et des femmes au Québec : une réestimation et un réexamen de la question," L'Actualité Economique, Société Canadienne de Science Economique, vol. 67(2), pages 144-165, juin.

    More about this item

    Keywords

    Natural rate of unemployment; Canada;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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