The NAIRU in Tunisia: Determinants, measurement and policy implications

Hajer EL Ouardani () and Mouez Soussi ()
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Hajer EL Ouardani: Higher School of Economic and Commercial Sciences of Tunis, University of Tunis, Tunisia
Mouez Soussi: Higher Commercial Studies Institute of Carthage, University of Carthage, Tunisia

Region et Developpement, 2020, vol. 52, 127-146

Abstract: This paper develops a model to determine the Non-Accelerating Inflation Rate of Unem-ployment (NAIRU) in Tunisia, i,e, the rate of unemployment at which inflation stabilizes in the absence of any wage-price adjustments. Using data for the period 1970-2016, the NAIRU in Tunisia appears to exhibit two characteristics: (1) it not only stands at a relative-ly high level but is above an actual unemployment rate that has been persistently high, and (2) it is sensitive to changes in average wages, the effective unemployment rate and the terms of trade, but insensitive to changes in labor productivity. Addressing the prob-lem of relatively high unemployment in Tunisia, would therefore call for a major refocus of the country’s economic policies towards measures that raise the level of factor productivity in the various economic sectors along with macroeconomic policies aimed at controlling inflationary pressures.

Keywords: NAIRU in Tunisia; Unemployment determinants; Labor productivity; Inflation; Macroeco-nomic policies (search for similar items in EconPapers)
JEL-codes: D24 E31 E52 J21 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tou:journl:v:52:y:2020:p:127-146

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