Monday, July 7, 2014

Jared and Dean on nairu Line

"The unemployment rate was generally below the CBO’s estimate of the NAIRU for most of the pe-riod prior to 1979. The unemployment rate has been above the estimated NAIRU for most of the years since 1979. From 1949 to 1979 the unemployment rate was a cumulative 15 percentage points below the NAIRU. From 1980 to 2012 it has been a cumulative total of 31 percentage points above the NAIRU." Noticing the deflection of wage rate growth in the 80's suggests the nairu line is a maginot line against wage rate blitzing by labor