nairu

Or NAI·RU

[ney-roo]

noun

Economics.

1. nonaccelerating inflation rate of unemployment: the lowest level of unemployment an economy can handle without causing inflation.

NAIRU

/ ˈnaɪruː /

acronym

1. Also called: natural rate of unemployment. non-accelerating inflation rate of unemployment: the rate of unemployment at which inflation is neither accelerating nor decelerating

Word History and Origins

Origin of nairu¹

First recorded in 1975–80; acronym

Example Sentences

If the jobless rate falls below NAIRU, the labor market gets too hot and inflation accelerates.

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If it rises above NAIRU, the labor market cools down and inflation decelerates.

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You might notice that both of these concepts—NAIRU and the sacrifice ratio—involve the labor market.

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Or, to put it another way: He thinks the problem is that the jobless rate is way below NAIRU.

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This is theoretical concept is known as the NAIRU—or the non-accelerating inflation rate of unemployment, if you don’t mind a mouthful.

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