The natural unemployment rate in Australia since the seventies
journal contribution
posted on 2023-05-16, 11:27authored byGroenewold, N, Hagger, AJ
The natural rate of unemployment is calculated based on Lilien's (1982) notion that an increase in the sectoral dispersion of demand results in a rise in unemployment for a given level of aggregate demand. In contrast to earlier applications, the dispersion measure is based on sectoral employment growth rates purged of aggregate influences using a VAR model. We find that most of the rise in unemployment in Australia since the 1970s reflects the increase in the underlying natural rate. This finding is broadly consistent with Lilien's results for the US as well as earlier results for Australia and Canada.
History
Publication title
The Economic Record
Volume
74
Issue
224
Pagination
24-35
ISSN
0013-0249
Department/School
TSBE
Publisher
Economic Soc Of Australia Brown Prior Anderson Pty Ltd