A model of NAIRU for Brazil

ABSTRACT In this article we present some estimates for the Non-Accelerating Inflation Rate of Unemployment (NAIRU) using Brazilian Data. Two different models, Nishizaki (1997) and Debelle and Laxton (1997), are used. The NAIRU is estimated using both the IBGE and DIEESE data. The results show a linear Phillips curve for Brazil and allow a good estimate of the NAIRU. For the IBGE data we obtain a time varying NAIRU while for the DIEESE data best estimate generates a fixed NAIRU. Our results are in line with the acceleration of inflation during the eighties and the price stability that follow the Real Plan.