NAIRU – Economics concept

Interpretation/notes from Economics Demystified, p.59.

The Non-accelerating inflation rate of unemployment (NAIRU): “the specific level of unemployment … in an economy that does not cause inflation” to increase (Non-Accelerating Inflation Rate Of Unemployment – NAIRU. No date. http://www.investopedia.com/terms/n/non-accelerating-rate-unemployment.asp. Investopedia.)

However, according to Thornton’s book there is no stable/fixed relationship (recall stagflation?) between unemployment and inflation (even though Kiwi economist William Phillips had first suggested an inverse relationship).

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