TY  - JOUR
AU  - Blanchard,Olivier
AU  - Katz,Lawrence F.
TI  - What We Know and Do Not Know About the Natural Rate of Unemployment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5822
PY  - 1996
Y2  - November 1996
UR  - http://www.nber.org/papers/w5822
L1  - http://www.nber.org/papers/w5822.pdf
N1  - Author contact info:
Olivier J. Blanchard
International Monetary Fund
Economic Counsellor and Director
Research Department
700 19th Street, NW
Rm. 10-700
Washington DC, 20431
Tel: 202-623-7825
Fax: 202-623-7271
E-Mail: blanchar@mit.edu

Lawrence F. Katz
Department of Economics
Harvard University
Cambridge, MA  02138
Tel: 617/495-5148
Fax: 617/613-1245
E-Mail: lkatz@harvard.edu
AB  - Over the past three decades, a large amount of research has attempted to identify the determinants of the natural rate of unemployment.  It is this body of work we assess in this paper. We reach two main conclusions.  First, there has been considerable theoretical progress over the past 30 years.  A framework has emerged.  We present it, and show how it can be used to think for example about the relation between technological progrss and unemployment.  Second, empirical knowledge lags behind.  Economists do not have a good quantitative understanding of the determinants of the natural rate, either across time or across countries.  We look at two issues, the relation of wages to unemployment, and the risk of European unemployment.
ER  -