What's the natural rate of unemployment? Answers from forecasters

For its panel survey of professional macroeconomic forecasters, the US Federal Reserve asks panelists whether they use the 'natural rate of unemployment' (NRU) or 'non-accelerating inflation rate of unemployment' (NAIRU) in formulating their forecasts and, also, to estimate the NRU/NAIRU. This paper studies responses and non-responses to those questions in order to interrogate forecasters' views of the NRU/NAIRU. We find that most panelists in most years say they do not use the NRU/NAIRU, and they do not provide an estimate of it. Among those who do, their NRU/NAIRU estimates differ but usually do not differ significantly from the average of recent unemployment rates. We fail to find much evidence - in either their inflation and unemployment forecasts, NRU/NAIRU estimates, or revisions to those estimates over time - that panelists who use the NRU/NAIRU treat it as an unemployment rate below which inflation rises and above which inflation falls. Finally, we find that the NRU/NAIRU has no informational value for panelists who say they use it; they are no better at accurately forecasting inflation or unemployment.