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The NAIRU and informality in the Mexican labor market/La NAIRU y la informalidad en el mercado laboral mexicano

Ana María Aguilar Argaez, Carlo Alcaraz Pribaz (), Claudia Ramírez and Cid Alonso Rodríguez Pérez
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Ana María Aguilar Argaez: Bank for International Settlements and Banco de México
Claudia Ramírez: Banco de México
Cid Alonso Rodríguez Pérez: Banco de México

Estudios Económicos, 2021, vol. 36, issue 1, 177-230

Abstract: The non-accelerating inflation rate of unemployment (NAIRU) is not directly observable and the presence of informal workers imposes an additional challenge in its estimation. In this paper, we present an estimation of the traditional NAIRU for Mexico and an alternative measure that includes informality as an indicator of labor underutilization. We find that both measures of NAIRU and the associated labor market slack indicators follow similar patterns over time. However, the slack estimated with the indicator that includes informality seems to predict inflationary pressures more accurately when the unemployment gap is close to zero.

Keywords: desempleo; informalidad; NAIRU; ciclo económico; unemployment, informality, business cycle (search for similar items in EconPapers)
JEL-codes: E26 E32 E52 (search for similar items in EconPapers)
Date: 2021
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