NAIRU
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6
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Search complete. 8 mentions across 6 episodes found for "NAIRU".
Oct 22, 2026
Nick RyderHOST
Yeah, so we've seen the RBA minutes, which were probably on the more hawkish side.
Nick RyderHOST
You know, there were really questions around the capacity, limited capacity in the Australian economy, whether rates were restrictive enough, what the NAIRU is, the non-accelerating rate of unemployment.
Nick RyderHOST
So they did lean hawkish.
Nick RyderHOST
And then in the last day, we've had Deputy Governor Andrew Hauser do a fireside chat where he said the inflation outlook looks materially worse than we projected in the
Luke YeamanGUEST
As I said, growth has slowed, but it still hasn't collapsed.
Luke YeamanGUEST
And if you look at the unemployment rate, for example, most economists would say that the NAIRU, the level at which the unemployment rate can be sustained without driving inflation, It sits probably somewhere in the 4.5% to 5% range.
Luke YeamanGUEST
We've only now got unemployment back to 4.7%.
Luke YeamanGUEST
So whichever way you look at it, we still have not got a lot of spare capacity sitting in the economy.
Jamie SmithGUEST
It's not reflective of how you deliver a balanced economy.
Patricia PinoHOST
To be devil's advocate, somebody from the mainstream may look at that word price stable full employment and interpret that as NAIRU.
Patricia PinoHOST
Like, if you read the whole context of it, it's obvious it doesn't mean that because you talk about other things there.
Patricia PinoHOST
But if you just took out that sentence, you know, somebody who considered themselves sound finance could say, "Well, yeah, we can fit this in sound finance," you know.
Patricia PinoHOST
But there's something fundamentally different about the approach, isn't it? I mean, how would you summarize it as simply-
Christian ReillyHOST
Could I devil's advocate your devil's advocate, Patricia, and just say that [laughs] the way they end is by saying one of the, the functional economic goals are price stable full employment and provide a social foundation and stay within ecological and planetary boundaries.
Christian ReillyHOST
So perhaps the NAIRU, again, for anybody new here, non-accelerating inflation rate of unemployment, so it's basically accepting a rate of involuntary unemployment to, quote, unquote, "tame inflation," which is the way we manage demand now.
Christian ReillyHOST
You know, I don't think that that fits the description of providing a social foundation.
Kim MundyGUEST
Yeah, it is.
Kim MundyGUEST
It also partly reflects the fact that we think Nairu to the non-accelerating inflation rate of unemployment is probably higher than our previous sort of level.
Kim MundyGUEST
So there's a bit of a technical adjustment going on in the back there.
Kim MundyGUEST
But when you do have businesses facing more uncertainty now, higher costs than we had previously expected, that's likely to flow through into labour demand.
Kim MundyGUEST
Yeah, it is.
Kim MundyGUEST
It also partly reflects the fact that we think Nairu to the non-accelerating inflation rate of unemployment is probably higher than our previous sort of level.
Kim MundyGUEST
So there's a bit of a technical adjustment going on in the back there.
Kim MundyGUEST
But when you do have businesses facing more uncertainty now, higher costs than we had previously expected, that's likely to flow through into labour demand.
Kim MundyGUEST
Yeah, it is.
Kim MundyGUEST
It also partly reflects the fact that we think Nairu to the non-accelerating inflation rate of unemployment is probably higher than our previous sort of level so there's a bit of a technical adjustment going on in the back there but when you do have businesses facing more uncertainty now higher costs than we had previously expected that's likely to flow through into labour demand And then we also think that once firms do start to get a bit more confident and do look at hiring, they're actually more likely to lift the hours of current workers before they start to hire new workers.
Kim MundyGUEST
So that will also just delay that reduction in the unemployment rate.
Mike HoskingHOST
And this is all against a backdrop.