Felix Salmon » Blog Archive » What’s happened to Nairu? | Blogs |
It was reported yesterday that a number of luminaries have diagnosed a significant upwards move in Nairu, the rate of unemployment below which inflation starts kicking in — or, to put it another way, the level of unemployment which the Fed should consider to constitute “full employment”. They include JP Morgan’s chief economist Bruce Kasman; Harvard’s Lawrence Katz; and Ned Phelps, who got his Nobel for looking at such things. Against that the Fed doesn’t seem to think that Nairu has increased at all.