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Can productivity growth explain the NAIRU? Long-run evidence from Britain, 1871-1999

Hatton, TJ (2007) 'Can productivity growth explain the NAIRU? Long-run evidence from Britain, 1871-1999.' Economica, 74 (295). 475 - 491. ISSN 0013-0427

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Abstract

This paper investigates the effect of productivity growth on the non-accelerating inflation rate of unemployment (NAIRU) over the long run, using historically consistent time series for the UK from 1871 to 1999. A two-equation model of unemployment and wage-setting that incorporates productivity effects is estimated over the whole period, allowing for shifts associated with changes in labour market institutions. The results indicate that faster productivity growth reduces the NAIRU, but that this goes only part of the way towards explaining wide swings in average unemployment across the decades. © The London School of Economics and Political Science 2006.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 06 Aug 2012 15:09
Last Modified: 17 Aug 2017 18:10
URI: http://repository.essex.ac.uk/id/eprint/3268

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