This paper proposes a method to estimate the NAIRU for the U.S. It shares the notion of Estrella and Mishkin (1999) that defines the NAIRU as a leading indicator of inflation changes over the policy horizon. Our alternative construction offers a more theoretically sound and practically useful estimate of the NAIRU.
Bibliographical noteFunding Information:
I would like to thank the editor of the journal. This research was supported by Yonsei University Research Fund of 2004. The usual disclaimer applies.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics