The Review of Economics and Statistics Vol. 85 No. 4 2003

Testing Steady-State Implications for the NAIRU

Gunnar Bårdsen¹; Ragnar Nymoen²

¹ Norwegian University of Science and Technology · ² University of Oslo

Abstract

Estimates of the NAIRU are usually derived either from a Phillips curve or from a wage curve. This paper investigates the correspondence between the operational NAIRU concepts and the steady state of a dynamic wage-price model. We derive the parameter restrictions that secure that correspondence. The full set of restrictions can be tested by econometric analysis of the wage-price system, and this method is demonstrated for Norwegian data. A set of necessary conditions can be tested from estimated wage curves alone. Existing international evidence from empirical wage equations are reinterpreted in light of these conditions.

DOI

10.1162/003465303772815943

Volume

85

Issue

4

Pages

1070-1075

Language

en

Sources

openalex crossref

Cite

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