You are not currently logged in.
Access JSTOR through your library or other institution:
If You Use a Screen ReaderThis content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Measuring the Nairu with Reduced Uncertainty: A Multiple-Indicator Common-cycle Approach
Arabinda Basistha and Richard Startz
The Review of Economics and Statistics
Vol. 90, No. 4 (Nov., 2008), pp. 805-811
Published by: The MIT Press
Stable URL: http://www.jstor.org/stable/40043116
Page Count: 7
You can always find the topics here!Topics: Economic models, Economic uncertainty, Parametric models, Statistical models, Unemployment, Economic inflation, Economic fluctuations, Confidence interval, Macroeconomic modeling, Gross domestic product
Were these topics helpful?See something inaccurate? Let us know!
Select the topics that are inaccurate.
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Preview not available
Standard estimates of the NAIRU or natural rate of unemployment are subject to considerable uncertainty. We show in this paper that using multiple indicators to extract an estimated NAIRU cuts in half uncertainty as measured by variance and gives a 33% reduction in the confidence band. The inclusion of an Okun's Law relation is particularly valuable. The essential notion is the existence of a common cyclical force driving the macroeconomic variables. Model comparisons based on the use of Bayes factors favor the idea of a common cyclical component.
The Review of Economics and Statistics © 2008 The MIT Press