Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/205550 
Year of Publication: 
2004
Series/Report no.: 
New Zealand Treasury Working Paper No. 04/10
Publisher: 
New Zealand Government, The Treasury, Wellington
Abstract: 
This paper estimates the non-increasing inflation rate of unemployment or NAIRU for New Zealand. A NAIRU that varies over time has important implications in considering inflationary pressures. This paper estimates the time-varying NAIRU using a Kalman filter on a reduced form approach and extends previous studies in several ways. Using different model specifications and dependent variables suggests a band of NAIRU estimates of between four and five percent (with further error bands around that). The results of this paper indicate that the NAIRU is a relevant concept and the unemployment gap should be one of the factors considered when assessing inflationary pressure.
Subjects: 
NAIRU
Kalman filter
Unemployment
Phillips Curve
New Zealand
JEL: 
E24
E31
C13
C22
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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