Running the economy "hot" repairs damage to potential output without permanently elevating inflation: Percent change in inflation following a large decrease in estimated NAIRUs for various OECD countries
| First three years | Second three years | Third three years | |
|---|---|---|---|
| Australia (1994-2007) | 8.8 | -17.5 | -14.4 |
| Finland (1996-2007) | 5.6 | -7.1 | 6.6 |
| Ireland (1989-2007) | 4.4 | 3.8 | 0 |
| Italy (1996-2007) | 3.9 | 3.2 | 0 |
| Netherlands (1988-2007) | 0 | 0 | 0 |
| New Zealand (1994-2007) | 0 | 0 | 0 |
| Portugal (1981-1992) | 0 | 0 | 0 |
| Spain (1995-2007) | 0 | 0 | 0 |
| UK (1987-2007) | -3.1 | 3.8 | 0 |
Note: The date range for each country encompasses the period in which the non-accelerating inflation rate of unemployment (NAIRU) changed, as well as the nine years following the NAIRU change.
Source: Author's analysis of data from Ball (2009)