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The NAIRU in Australia
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ABSTRACTThis article examines the concept of the non‐accelerating inflation rate of unemployment (NAIRU) and its application in Australia. We review its theoretical origins, international and domestic development, and the Reserve Bank of Australia's model‐based estimation approach. Using three different NAIRU models, we evaluate whether recent labour market outcomes support a lower NAIRU than the Bank's published 4.5 per cent benchmark. The findings suggest that while some indicators point to a modest decline, the central estimate remains near the RBA's official figure.
Title: The NAIRU in Australia
Description:
ABSTRACTThis article examines the concept of the non‐accelerating inflation rate of unemployment (NAIRU) and its application in Australia.
We review its theoretical origins, international and domestic development, and the Reserve Bank of Australia's model‐based estimation approach.
Using three different NAIRU models, we evaluate whether recent labour market outcomes support a lower NAIRU than the Bank's published 4.
5 per cent benchmark.
The findings suggest that while some indicators point to a modest decline, the central estimate remains near the RBA's official figure.
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