To estimate long-run growth based on the so-called potential GDP became a constant preoccupation among economists. However, one remaining problem in every long-run growth model is to estimate a persistent trend in labour productivity outside of it, in order to avoid the implicit circular...

As asserted in standard literature, there is an implicit circular relationship between the productivity growth and the potential level of production (and, consequently, the estimation of the natural rate of unemployment is also altered). In order to avoid such emerging impediment in any...

As asserted in standard literature, there is an implicit circular relationship between the productivity growth and the potential level of production (and, consequently, the estimation of the natural rate of unemployment is also altered). In order to avoid such emerging impediment in any...

This paper provides a critique of the "unemployment invariance hypothesis", according to which the behavior of the labor market ensures that the long-run unemployment rate is independent of the size of the capital stock, productivity, and the labor force. Using Solow growth and endogenous growth...

This paper provides a critique of the "unemployment invariance hypothesis," according to which the behavior of the labor market ensures that the long-run unemployment rate is independent of the size of the capital stock, productivity, and the labor force. Using Solow growth and endogenous growth...

We reconsider the central role of the natural rate of unemployment (NRU) in forming policy decisions. We show that the unemployment rate does not gravitate towards the NRU due to frictional growth, a phenomenon that encapsulates the interplay between lagged adjustment processes and growth in...

We reconsider the central role of the natural rate of unemployment (NRU) in forming policy decisions. We show that the unemployment rate does not gravitate towards the NRU due to frictional growth, a phenomenon that encapsulates the interplay between lagged adjustment processes and growth in...

This article explores the long-run relationship between unemployment rate and labor force participation rate in Canada. The cointegration analysis vindicates the existence of a long-run relationship between these two variables. This finding leads us to doubt the pertinence of the unemployment...

Labour market tightness, that is the ratio of jobs to the unemployed, has an impact on wage setting, which also affects inflation. Among other things, the unemployment gap, which is the difference between unemployment rate and non-accelerating inflation rate of unemployment (NAIRU), is used to...