TY  - JOUR
AU  - Ball,Laurence
TI  - Disinflation and the NAIRU
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5520
PY  - 1996
Y2  - March 1996
UR  - http://www.nber.org/papers/w5520
L1  - http://www.nber.org/papers/w5520.pdf
N1  - Author contact info:
Laurence M. Ball
Department of Economics
Johns Hopkins University
Baltimore, MD 21218
Tel: 410/516-7605
Fax: 410/516-7600
E-Mail: lball@jhu.edu
M1  - published as Laurence M. Ball. "Disinflation and the NAIRU," in Christina D. Romer and David H. Romer, Editors, "Reducing Inflation: Motivation and Strategy" University of Chicago Press (1997)

AB  - This paper asks why the NAIRU rose in most OECD countries in the 1980s.  I find that a central cause was the tight monetary policy used to reduce inflation.  The evidence comes from a cross-country comparison: countries with larger decreases in inflation and longer disinflationary periods have larger rises in the NAIRU.  Imperfections in the labor market have little direct relation to changes in the NAIRU, but long-term unemployment benefits magnify the effects of disinflation.  These results support `hysteresis' theories of unemployment.
ER  -