A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States

65 Pages Posted: 15 Feb 2006

See all articles by Charles L Adams

Charles L Adams

affiliation not provided to SSRN

David T. Coe

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

Date Written: October 26, 1989

Abstract

The methodology used in this paper has three distinguishing features: the natural rate of unemployment and potential output are jointly estimated; estimation integrates wage and price data with "real" and structural data; and third, the methodology encompasses many of the methods found in the literature. The results indicate that potential output growth has recovered somewhat during the early 1980s, but remains below the rapid rates of increase in the late 1960s. The natural rate, after rising during the late 1960s and the 1970s, is found to have declined in the 1980s. The paper concludes with an assessment of medium-term prospects for potential output and the natural rate.

JEL Classification: 110, 130, 820

Suggested Citation

Adams, Charles L and Coe, David T., A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States (October 26, 1989). IMF Working Paper No. 89/89, Available at SSRN: https://ssrn.com/abstract=885042

Charles L Adams (Contact Author)

affiliation not provided to SSRN

David T. Coe

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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