Production Constraints and the NAIRU

Ciaran Driver and Stephen George Hall ()

No 2007-41, Economics Discussion Papers from Kiel Institute for the World Economy

Abstract: This paper argues that the production constraints in the basic NAIRU model should be distinguished by type: capital constraints and labour constraints. It notes the failure to incorporate this phenomenon in standard macro models. Using panel data for UK manufacturing over eighty quarters it is shown that capital constraints became relatively more important during the 1980s as industry failed to match the increase in labour flexibility with rising capital investment.

Keywords: capital labour constraints nairu panel; data structural; breaks (search for similar items in EconPapers)
JEL-codes: C23 E24 E22 D24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2007

Downloads: (external link)
http://www.economics-ejournal.org/economics/discussionpapers/2007-41 (application/pdf)

Related works:
Journal Article: Production Constraints and the NAIRU (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:zbw:ifwedp:6168

Access Statistics for this paper

More papers in Economics Discussion Papers from Kiel Institute for the World Economy
Contact information at EDIRC.
Series data maintained by ZBW - German National Library for Economics ().