Production Constraints and the Nairu

17 Pages Posted: 18 Dec 2010

See all articles by Ciaran Driver

Ciaran Driver

SOAS University of London School of Finance and Management

Stephen Hall

ESRC Centre for Economic and Social Aspects of Genomics (Cesagen)

Multiple version iconThere are 2 versions of this paper

Date Written: 2008

Abstract

This paper argues that the production constraints in the basic NAIRU model should be distinguished by type: capital constraints and labour constraints. It notes the failure to incorporate this phenomenon in standard macro models. Using panel data for UK manufacturing over 80 quarters we show that capital constraints became relatively more important during the 1980s as industry failed to match the increase in labour flexibility with rising capital investment. --

Keywords: Capital, labour, constraints, NAIRU, panel data, structural breaks

JEL Classification: C23, D24, E22, E24

Suggested Citation

Driver, Ciaran and Hall, Stephen, Production Constraints and the Nairu (2008). Economics: The Open-Access, Open-Assessment E-Journal, Vol. 2, 2008-11, Available at SSRN: https://ssrn.com/abstract=1726805 or http://dx.doi.org/10.5018/economics-ejournal.ja.2008-11

Ciaran Driver

SOAS University of London School of Finance and Management ( email )

Thornhaugh St
London, WC1H 0XG
United Kingdom

Stephen Hall (Contact Author)

ESRC Centre for Economic and Social Aspects of Genomics (Cesagen) ( email )

Institute for Advanced Study
County South
Lancaster, Lancashire LA1 4YD
Great Britain

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
41
Abstract Views
660
PlumX Metrics