Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7369221 | Journal of Policy Modeling | 2017 | 41 Pages |
Abstract
This paper analyzes the determinants of the European Commission's estimates of the non-accelerating inflation rate of unemployment (NAIRU) for 14 European countries during 1985-2012. The NAIRU is a poor proxy for 'structural unemployment'. Labor market institutions - employment protection legislation, union density, tax wedge, minimum wages - underperform in explaining the NAIRU, while cyclical variables - capital accumulation and boom-bust patterns in housing markets - play an important role. This finding is policy-relevant since the NAIRU is used to compute potential output and structural budget balances and, hence, has a direct impact on scope and evaluation of fiscal policies in Europe.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Philipp Heimberger, Jakob Kapeller, Bernhard Schütz,