NAIRU plummets, shifting job market dynamics and inflation rates.
The NAIRU for the U.S. was calculated using a structural VAR approach to estimate the component of the actual unemployment rate that is uncorrelated with inflation in the long run. The study found that the NAIRU dropped significantly at the end of the 1990s, and the long-term vertical Phillips Curve shifted from 6.8% before 1997 to 4% afterwards.