Time-varying Nairu and Real Interest Rates in the Euro Area
Camille Logeay and
No 351, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research
This paper analyses the Nairu in the Euro Area and the influence that monetary policy had on its development. Using the Kalman-filter technique we find that the Nairu has varied considerably since the early seventies. The Kalman-filter technique is applied here for the first time using explicit exogenous variables. In particular real interest rates were found to explain a quarter of the increase in the Nairu between 1980 and 1995. This indicates the possibility of a long-run non-superneutrality of monetary policy.
Keywords: Nairu; Monetary Policy; Kalman Filter; Phillips curve; Superneutrality (search for similar items in EconPapers)
JEL-codes: C32 E32 E52 (search for similar items in EconPapers)
Pages: 37 p.
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Working Paper: Time-Varying Nairu and Real Interest Rates in the Euro Area (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp351
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