Level of unemployment below which inflation would be expected to rise
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Non-accelerating inflation rate of unemployment (NAIRU)[1] is a theoretical level of unemployment below which inflation would be expected to rise.[2] It was first introduced as NIRU (non-inflationary rate of unemployment) by Franco Modigliani and Lucas Papademos in 1975, as an improvement over the "natural rate of unemployment" concept,[3][4][5] which was proposed earlier by Milton Friedman.[6]
In the United States, estimates of NAIRU typically range between 5 and 6%.[2] Monetary policy conducted under the assumption of a NAIRU, typically involves allowing just enough unemployment in the economy to prevent inflation rising above a given target figure. Prices are allowed to increase gradually and some unemployment is tolerated.
^Coe, David T, Nominal Wages. The NAIRU and Wage Flexibility.(PDF), Organisation for Economic Co-operation and Development
^ abThe NAIRU, explained: why economists don't want unemployment to drop too low, Vox, Matthew Yglesias, Nov 14, 2014. " . . it's broadly agreed that the NAIRU can change over time. . "
^Modigliani, Franco; Papademos, Lucas (1975). "Targets for Monetary Policy in the Coming Year" (PDF). Brookings Papers on Economic Activity. 1975 (1). The Brookings Institution: 141–165. doi:10.2307/2534063. JSTOR 2534063.
^Robert M. Solow, Modigliani and Monetarism Archived 2014-12-28 at the Wayback Machine, p. 6.
^Snowdon, Brian; Vane, Howard R. (2005). Modern Macroeconomics: Its Origins, Development and Current State. Cheltenham: E. Elgar. p. 187. ISBN 1-84376-394-X.
^Friedman, Milton (1968). "The Role of Monetary Policy". American Economic Review. 58 (1): 1–17. JSTOR 1831652.
Non-accelerating inflation rate of unemployment (NAIRU) is a theoretical level of unemployment below which inflation would be expected to rise. It was...
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unemployment (NAIRU) or what's sometimes called the "natural" rate of unemployment or the inflation-threshold unemployment rate: Here, U* is the NAIRU. As discussed...
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'non-accelerating inflation rate of unemployment' (NAIRU) by controlling the official cash rate. The NAIRU was implemented in most western nations after 1975...
data. Classical dichotomy Diamond coconut model Frictional unemployment NAIRU NAIBER Phillips curve Reserve army of labour "The Sveriges Riksbank Prize...
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Warren Mosler, and advocated by Modern Money Theory as replacement for NAIRU (non-accelerating inflation rate of unemployment). The concept of NAIBER...
"Keynesianism" of his viewpoints, pointing out his contribution to the NAIRU concept, as well as his general stance on fiscal deficits. The Modigliani-Miller...
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It corresponds to the Non-Accelerating Inflation Rate of Unemployment, NAIRU, or the "natural" rate of unemployment (sometimes called the "structural"...
somewhat lower inflation and higher unemployment (see Phillips curve § NAIRU and rational expectations). But if the policy announcement is deemed credible...
Blanchflower, David (August 2018). "The Lack of Wage Growth and the Falling NAIRU". National Institute Economic Review. 245 (1): 40–55. Whilst an unemployed...