| Author (Person) | Hristov, Atanas, Planas, Christophe, Roeger, Werner, Rossi, Alessandro |
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| Author (Corporate) | European Commission: DG Economic and Financial Affairs |
| Publisher | Publications Office of the European Union |
| Series Title | European Economy: Discussion Papers |
| Series Details | Number 69 |
| Publication Date | 16/10/2017 |
| ISBN | 978-92-79-64929-5 |
| ISSN | 2443-8022 |
| Content Type | Research Paper |
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Summary: The use of unobserved component models to estimate the NAWRU has been strongly criticized due to some excessive pro-cyclicality at the sample end, especially in the neighbourhood of turning points. To address this criticism, the European Commission now uses a model-based approach where the information set is augmented with a structural indicator of the labour market to which the NAWRU is supposed to converge in a certain number of years. The resulting NAWRU estimates mixes information about the business cycle and the labour market characteristics. The application to the EU Member States shows that besides moderating pro-cyclicality, this approach also reduces the first revision to the one- and two-year-ahead forecasts of the NAWRU in four-fifth of the countries considered. |
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| Source Link |
Link to Main Source
https://ec.europa.eu/info/publications/economy-finance/nawru-estimation-using-structural-labour-market-indicators_en
Alternative sources
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| Subject Categories | Employment and Social Affairs |
| Subject Tags | Labour Market |
| Keywords | Non-accelerating Wage Rate of Unemployment [NAWRU} |
| Countries / Regions | Europe |
| International Organisations | European Union [EU] |
