NAIRU: THE INDICATOR AND ITS ESTIMATION METHODS

Economic policy makers require precise information on the current
stance of the national economy. On the macroeconomic level, in addition to identifying the phase of the business cycle, of utmost importance is the information whether the economy is close to “overheating”. One of the indicators used for the purposes of identifying infl ation pressures in the national economy indicating the overheating, is NAIRU. The paper contains review of recent literature on macroeconomic theories defining the NAIRU indicator, but it also reviews empirical studies. The special emphasis is put on the presentation of different estimation techniques, as the interpretation of the estimated NAIRU in the national economy strongly depends on the estimation method used.