VOLUME IX
WINTER 2001

A SURVEY OF EQUILIBRIUM UNEMPLOYMENT ESTIMATIONS
 
FRANCISCO GÓMEZ
Universidad de Sevilla
CARLOS USABIAGA
Universidad Pablo de Olavide
 
This article takes the form of a survey of the equilibrium unemployment estimates for the Spanish economy performed since the mid-eighties. First, we consider the essence of the estimation methods most commonly used to measure equilibrium unemployment, and highlight their properties and limitations. We classify these methods in two groups, depending on whether or not they are based on the NAIRU notion. Secondly, we analyse what we consider to be the most representative estimates for the Spanish economy, which can be organised basically into two groups: those based on the NAIRU notion and the recent estimates based on the VAR methodology. In our analysis we pay special attention to the main features of these estimates (theoretical framework, estimation method, specifications, etc.) and their economic policy implications. We close our work with some final reflections, which also try to shed light on future developments in this area.
 
Key words: equilibrium unemployment, NAIRU, VAR methodology, Phillips curve, hysteresis.
JEL classification: E24.

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