COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 1129

Estimated Inflation Costs Had European Unemployment
Been Reduced in the 1980s by Macro Prices

Ray C. Fair

August 1996

This paper uses a multicountry econometric model to estimate what the inflation costs would have been if macropolicies had reduced European unemployment in the 1982:1-1990:4 period. A "non-NAIRU" framework is proposed for thinking about these costs.