TeachMeFinance.com - explain NAIRU (nonaccelerating inflation rate of unemployment)
NAIRU (nonaccelerating inflation rate of unemployment) -- The unemployment rate consistent
with a constant inflation rate. An unemployment rate higher than the NAIRU indicates downward pressure
on inflation, whereas an unemployment rate lower than the NAIRU indicates upward pressure on inflation.
Estimates of the NAIRU are based on the historical relationship between inflation and the unemployment
rate. (CBO's procedures for estimating the NAIRU are described in Appendix B of The Economic and
Budget Outlook: An Update, August 1994.)
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