The natural rate of unemployment, or long-run equilibrium state of the labor market, is a useful concept in assessing economic situations and setting up macroeconomic policy directions. For Korea as well, there have been efforts to estimate the natural rate of unemployment. Nevertheless, each of the previous researches relies on a particular estimation method with no clear grounds for assessing the result in comparison with others, which limits the practical usefulness of the estimated natural rate of unemployment. This paper re-examines various estimation methods for Korea's natural rate of unemployment, and compares the results along with discussion about relative advantages and disadvantages of each estimation method. In particular, this paper examines pure time-series methods, reduced-form methods, and structural form methods.
Pure time-series methods decompose the unemployment rate into cyclical and trend parts, and define the trend part as the natural rate of unemployment. (The rest omitted)
한국의 자연실업률 추정방법 비교연구(A comparative study on estimation methods for Korea's natural rate of unemployment)
|Series Title; No||정책연구시리즈|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Social Development < Employment|
|Holding||KDI; KDI School|