Labor-Market Performance and Macroeconomic Policy: Time-Varying NAIRU in the Czech Republic
Hurník, Jaromír; Navrátil, David
Year: 2005 Volume: 55 Issue: 1 -2 Pages: 25-40
Abstract: During the second half of the 1990s, the Czech economy experienced a sharp increase in the unemployment rate. The authors attempt to determine whether this was caused by structural changes, worsening labor-market performance, or by the changing business-cycle position. This has direct implications for both monetary and fiscal policy. The authors use NAIRU (non-accelerating inflation rate of unemployment) estimates using time-varying NAIRU. The estimates indicate that the NAIRU increased between 1996 and 2002 by approximately 1.5 percent. Estimated increases in the NAIRU can be associated with the worsening of labor-market efficiency.
JEL classification: E24, E32, J21
Keywords: forward-looking expectations; maximum-likelihood methods; non-accelerating inflation rate of unemployment; time-varying NAIRU
RePEc: http://ideas.repec.org/a/fau/fauart/v55y2005i1-2p25-40.html
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