Resource title

Production Constraints and the NAIRU

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Resource description

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 eighty quarters it is shown that capital constraints became relatively more important during the 1980s as industry failed to match the increase in labour flexibility with rising capital investment.

Resource author

Ciaran F. Driver, Stephen G. Hall

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/17964

Resource license

Adapt according to the presented license agreement and reference the original author.