NAIRU from trailing 20-year price-price Phillips curve rolling regression, 1978–2015
Notes: This chart is from 2016 Economic Report of the President. NAIRU is the unemployment rate that keeps inflation stable. It is calculated as α/β. Dashed line represents result from regression over entire sample period. Shaded area indicates a 50 percent confidence band around the point estimate, calculated using a method discussed in Staiger, Stock, and Watson (1997) for analyzing the ratio of the means of two dependent normal random variables. Confidence bands since 2012 include implausible negative values.
Sources: Bureau of Labor Statistics; Federal Reserve Board, Haver Analytics; Council of Economic Advisers calculations