NAIRU Estimates for Germany: New Evidence on the Inflation–Unemployment Tradeoff
-
Florian Kajuth
Abstract
Meaningful estimates of the non-accelerating inflation rate of unemployment (NAIRU) within a Phillips curve framework require an identified tradeoff between inflation and unemployment. However, observations of inflation and unemployment are equilibrium points giving rise to a simultaneity problem. We assess conventional identifying assumptions in the literature on the German NAIRU in a general bi-variate equations system of inflation and unemplyoment. We use a data-driven method for identification based on shifts in the relative volatility of shocks to unemployment and inflation to identify the tradeoff for Germany. Our results support models which estimate a contemporaneous effect of unemployment on inflation and those which model inflation and unemployment jointly.
© 2019 by Walter de Gruyter Berlin/Boston
Articles in the same Issue
- The Role of Migration in the Variety and Quality of Trade: Evidence from Germany
- Status Goods and Market Powers
- Contributing for Myself, but Free riding for My Group?
- Efficiency Defense in EU and US Horizontal Merger Control if Costs are Endogenous
- Analyzing Educational Achievement Differences between Second-Generation Immigrants: Comparing Germany and German-Speaking Switzerland
- Vertically Linked Industries, Product Quality and Minimum Quality Standards
- NAIRU Estimates for Germany: New Evidence on the Inflation–Unemployment Tradeoff
Articles in the same Issue
- The Role of Migration in the Variety and Quality of Trade: Evidence from Germany
- Status Goods and Market Powers
- Contributing for Myself, but Free riding for My Group?
- Efficiency Defense in EU and US Horizontal Merger Control if Costs are Endogenous
- Analyzing Educational Achievement Differences between Second-Generation Immigrants: Comparing Germany and German-Speaking Switzerland
- Vertically Linked Industries, Product Quality and Minimum Quality Standards
- NAIRU Estimates for Germany: New Evidence on the Inflation–Unemployment Tradeoff
