Economics Explored

Natural rate of unemployment or NAIRU

Episode Summary

The natural rate of unemployment and the NAIRU - are they the same? Why are they important? What affects them?

Episode Notes

Economics Explored host Gene Tunny discusses the natural rate of unemployment and the non-accelerating inflation rate of unemployment, the NAIRU. He considers whether they're the same thing, why they are important, and what affects them. 

Links relevant to the episode include:

Milton Friedman's 1967-68 AEA Presidential Address on the role of monetary policy

Kansas City Fed paper on a new estimate of the natural rate of unemployment

RBA paper on Estimating the NAIRU and the Unemployment Gap

Brookings post on What is u*?

Carl E. Walsh on The Natural Rate, NAIRU, and Monetary Policy