Estimating Structural Unemployment

Following up on the earlier thread on the reform of the output gap estimation method, this VOXEU article by Andres and Domenech is relevant – here.

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3 thoughts on “Estimating Structural Unemployment”

  1. This post is interesting, and deserves more than one comment.

    thank you ! Because in general I do not subscribe to this “no comment” outlet anymore.

    And it makes some valuable points.

    What I want point out,

    1. to use the “structural” as a fudge factor was expected at signing the ESM, at least by me, consciously.

    2. if Spain runs its economy with unemployment oscillating between 25% and barely below 9% even in “once in a century” boom times, than the applicability of traditional concepts like various “curves” is somewhat questionable. And you all know, what is coming from a German now :

    This is structural, not business cycle : – )

  2. The nearly last sentence at the wsj:

    “The reason is the commission’s grim assumption that the “natural” rate of unemployment in Spain—if the economy were operating at full potential—is 23%.”

    made me nearly puke my breakfast. What are the left and right governments doing there?

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