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Economic Commentary

In Search of the NAIRU

Few ideas arise more frequently in monetary policy discussions than the NAIRU, an acronym for the awkward phrase “nonaccelerating inflation rate of unemployment.” The NAIRU—or more precisely, its relationship to the unemployment rate—is presumed to be an inflationary bellwether. When the actual unemployment rate exceeds the NAIRU, the inflation rate falls; when the actual rate is below the NAIRU, inflation rises.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Altig, David, and Paul Gomme. 1998. “In Search of the NAIRU” Federal Reserve Bank of Cleveland, Economic Commentary 5/1/1998.