Macroeconomic policy and the NAIRU in European economies
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Macroeconomic policy and the NAIRU in European economies by Claude Giorno

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Published by European University Institute. Robert Schuman Centre in San Domenico .
Written in English


Book details:

Edition Notes

StatementClaude Giorno, Alain Deserres and Peter Sturm.
SeriesEUI working paper -- 97/50
ContributionsDeserres, Alain., Sturm, Peter.
ID Numbers
Open LibraryOL18387752M

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The authors make a strong case that a stable Non-Accelerating Inflation Rate of Unemployment (NAIRU), independent of macroeconomic policy, does not exist. Consequently, government decisions based on the NAIRU are not only misguided but have huge and avoidable social costs, namely, high unemployment and sustained inequality. ABOUT THIS BOOK The authors make a strong case that a stable non-accelerating inflation rate of unemployment (NAIRU), independent of macroeconomic policy, does not exist. Consequently, government decisions based on the NAIRU are not only misguided but have huge and avoidable social costs, namely, high unemployment and sustained inequality. Disinflation and the NAIRU U* is determined by microeconomic features of labor hysteresis models, U* is also influenced by the path of actual unemployment, and hence by macroeconomic policy. In calculating the NAIRU, I follow Elmeskov (), whose approach is also used in The OECD Jobs ov estimates the unemployment.   We address the question posed in the title of this paper by investigating recent developments in the literature that estimates the NAIRU. A necessary condition for the existence of a NAIRU is dynamic homogeneity: the Phillips curve should be homogeneous of degree one in lagged and/or expected inflation. But contemporary approaches to estimating the NAIRU typically assume .

Disinflation and the NAIRU Laurence Ball. NBER Working Paper No. Issued in March NBER Program(s):Economic Fluctuations and Growth, Monetary Economics. This paper asks why the NAIRU rose in most OECD countries in the s. I find that a central cause was the tight monetary policy used to reduce inflation. Theword“NAIRU”entered the language of macroeconomics in the s, a period of rapid and rising in‘ation. Yet, in a deeper sense, the concept has been there all along. A Building Block of Macroeconomic Theory A long tradition in economics emphasizes that the supply of money in‘uences bothin‘ation and unemployment. Discover the best Nairu books and audiobooks. Learn from Nairu experts like Center for Economic and Policy Research and Center for Economic and Policy Research. Read Nairu books like Failing on Two Fronts and Getting Back to Full Employment with a free trial. The natural rate of unemployment is a key concept in modern macroeconomics. Its use originated with Milton Friedman’s Presidential Address to the American Economic Association in which he argued that there is no long-run trade-off between inflation and unemployment: As the economy adjusts to any average rate of inflation, unemployment returns to its “natural” rate.

Non-accelerating inflation rate of unemployment (NAIRU) is a theoretical level of unemployment below which inflation would be expected to rise. It was first introduced as NIRU (non-inflationary rate of unemployment) by Franco Modigliani and Lucas Papademos in , as an improvement over the "natural rate of unemployment" concept, which was proposed earlier by Milton Friedman. fiscal policy, and; the balance of payments for the euro area. The economic analysis also includes a thorough analysis of shocks hitting the euro area economy, their effects on cost and pricing behaviour and the short to medium-term prospects for their propagation in the economy. So taken together, this part of the European Union economic structure is an important part of the overall machinery that disciplines fiscal policy at the Member State level. It is austerity-central. If you examine their output in the period since the GFC began you will see that they consistently inform European officials that fiscal deficits in. The authors combine policy, history and data to present a global perspective of the EU, written with a range of students taking an introductory module in European Economics in mind. With new material on the economic relationship between the EU and the US, Enlargement and the Lisbon process the authors consider the changing landscape and Europe Reviews: 2.