| Abstract: | This paper analyses the Nairu in the Euro Area and the influence that hysteresis had on its development. Using the Kalman‐filter technique we find that the Nairu has varied considerably since the early 1970s. The Kalman‐filter technique is applied here using explicit exogenous variables. In order to test for hysteresis, the dependence of the Nairu on actual unemployment and long‐term unemployment is estimated and found to be significant for the Euro Area and Germany, respectively. The existence of hysteresis effects implies the possibility of a long‐run non‐superneutrality of monetary policy. |
