Estimating Natural Rates of Unemployment

Brandyn Bok and Nicolas Petrosky-Nadeau

FRBSF Economic Letter, 2022, vol. 2022, issue 14, 05

Abstract: Before the pandemic, the U.S. unemployment rate reached a historic low that was close to estimates of its underlying longer-run value and the short-run level associated with an absence of inflationary pressures. After two turbulent years, unemployment has returned to its pre-pandemic low, and the estimated underlying longer-run unemployment rate appears largely unchanged. However, economic disruptions appear to have pushed up the short-run noninflationary rate substantially, as high as 6%. Examining these different measures of the natural rate of unemployment can provide useful insights for policymakers.

Keywords: covid19; pandemic; unemployment; natural rate of unemployment; noninflationary rate of unemployment (search for similar items in EconPapers)
Date: 2022
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