[position in research by date]
[position in research by subject]
"Testing the NAIRU Model for the United
The Review of Economics and Statistics, February 2000, 64-71.
pdf file (1,431 KB).
This paper tests, using U.S. data, the dynamics implied by the NAIRU view
of the relationship between inflation and the unemployment rate. The results
are somewhat sensitive to the measure of inflation used, but they generally
reject the dynamics. An alternative way of thinking about the relationship
between inflation and the unemployment rate is suggested.
The NAIRU model seems inconsistent with the data. I argue in this
paper for thinking in more nonlinear terms and without the NAIRU dynamics.