Structural Determinants of the Natural Rate of Unemployment in Canada

28 Pages Posted: 15 Feb 2006

See all articles by David T. Coe

David T. Coe

International Monetary Fund (IMF); National Bureau of Economic Research (NBER)

Date Written: April 6, 1989

Abstract

This paper presents empirical estimates of the policy and structural determinants of the natural rate of unemployment in Canada. The paper begins with a discussion of structural features of the economy which impinge on the adjustment of real wages to their equilibrium level. Estimates are presented showing how the generosity of the unemployment insurance system is related to past levels of unemployment. The empirical results indicate that government policies have been largely responsible for changes in the natural rate, and hence can contribute to a reduction in the natural rate in the medium term.

JEL Classification: 822, 824

Suggested Citation

Coe, David T., Structural Determinants of the Natural Rate of Unemployment in Canada (April 6, 1989). IMF Working Paper No. 89/31, Available at SSRN: https://ssrn.com/abstract=884706

David T. Coe (Contact Author)

International Monetary Fund (IMF) ( email )

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National Bureau of Economic Research (NBER)

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