Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171422
Authors: 
Kapeller, Jakob
Heimberger, Philipp
Schütz, Bernhard
Year of Publication: 
2016
Series/Report no.: 
ICAE Working Paper Series 47
Abstract: 
This paper analyzes the determinants of the European Commission's NAIRU estimates for 14 European OECD 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 is relevant since the NAIRU is used to compute potential output and structural budget balances and, hence, has a direct impact on the scope and evaluation of fiscal policy in EU countries.
Subjects: 
NAIRU
potential output
fiscal policy coordination
unemployment in Europe
labor market flexibility
JEL: 
C54
E24
E62
Document Type: 
Working Paper

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