NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The NAIRU in Theory and Practice

Laurence Ball, N. Gregory Mankiw

NBER Working Paper No. 8940
Issued in May 2002
NBER Program(s):   EFG   ME

This paper discusses the NAIRU -- the non-accelerating inflation rate of unemployment. It first considers the role of the NAIRU concept in business cycle theory, arguing that this concept is implicit in any model in which monetary policy influences both inflation and unemployment. The exact value of the NAIRU is hard to measure, however, in part because it changes over time. The paper then discusses why the NAIRU changes and, in particular, why it fell in the United States during the 1990s. The most promising hypothesis is that the decline in the NAIRU is attributable to the acceleration in productivity growth.

download in pdf format
   (210 K)

email paper

This paper is available as PDF (210 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8940

Published: Ball, Laurence and N. Gregory Mankiw. "The NAIRU In Theory And Practice," Journal of Economic Perspectives, 2002, v16(4,Fall), 115-136. citation courtesy of

Users who downloaded this paper also downloaded these:
Estrella and Mishkin Rethinking the Role of NAIRU in Monetary Policy: Implications of Model Formulation and Uncertainty
Ball What Determines the Sacrifice Ratio?
Blanchard w11750 European Unemployment: The Evolution of Facts and Ideas
Ball and Moffitt w8421 Productivity Growth and the Phillips Curve
Gordon w5735 The Time-Varying NAIRU and its Implications for Economic Policy
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us