A common method of evaluating the scope for demand expansion is to try to estimate a threshold rate of unemployment above which policies of demand stimulus are non-inflationary. However, this non-accelerating inflation rate of unemployment (NAIRU) seems to have been anything but stable over the...

This paper analyses the Nairu in the Euro Area and the influence that monetary policy had on its development. Using the Kalman-filter technique we find that the Nairu has varied considerably since the early seventies. The Kalman-filter technique is applied here for the first time using explicit...

This paper derives alternative measures of the short-run NAIRU (SRN) for the UK, the rate for unemployment at which inflation will neither increase nor decrease in the short-run. We estimate the NAIRU jointly with price equations by using the Kalman filter. Our work suggests that both structural...