Whatever our views, NAIRU provides a structure of policy for the central bank. Not quite. Take Africa. Definition of employment is fuzzy, which should be a point of different not value judgement. Wage inflation, we cannot measure it if we cannot define employment. Consequently, the central bank has no structure for policy. They will leave graduate schools in the West armed with NAIRU and kindred frames. How often do they go back with the fundamentals of dynamical systems that would allow them mould appropriate frames? We would make progress if development economics found physics. How?
Dear Fred, I will not defend the economics behind your question, but I would recommend to try an operational definition of employment for your environment and then use it in order to determine the evolution of aggregate demand. I am sure this is possible nd therefore, central bank does have the required structure.
- Badges
- Science topic
- Similar topics
- Correction