Acta Universitatis Danubius. Œconomica, Vol 10, No 1 (2014)

The Kalman Filter Approach for Estimating the Natural Unemployment Rate in Romania

Simionescu Mihaela

Abstract


The aim of this research is to determine the monthly natural rate of unemployment during the third quarter of 2013 in Romania. The Phillips curve approach is not valid for the Romanian economy, but Kalman filter is a suitable approach for computing the natural rate of unemployment. The presence of cycle component is obvious, making the assumption that this component follows a random walk. A very slow and insignificant decrease was observed for the predicted unemployment rate using Kalman approach during July-September 2013. A value of 5.85% is expected for unemployment rate in Romania in September 2013.  

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