To make high-quality research more accessible and easier to explore.

Fields:

NAIRU Uncertainty and Nonlinear Policy Rules

American Economic Review 2001 91(2), 226-231 open access
Meyer (1999) has suggested that episodes of heightened uncertainty about the NAIRU may warrant a nonlinear policy response to changes in the unemployment rate. This paper offers a theoretical justification for such a nonlinear policy rule, and provides some empirical evidence on the relative performance of linear and nonlinear rules when there is heightened uncertainty about the NAIRU.