1 Matching Annotations
  1. Apr 2019
    1. The measure known as u* (pronounced you-star), also referred to as the natural rate of unemployment or NAIRU (the non-accelerating inflation rate of unemployment), is the rate of unemployment at which inflation is stable. If unemployment is higher than u*, then there are a lot of people looking for jobs and few job openings, so employers can offer lower wages and wage and price inflation will tend to fall. When unemployment is lower than u*, there are lots of jobs to fill and fewer available workers, so employers raise wages to attract workers, and inflation rises.