In their seminal paper, Staiger, Stock and Watson (1997) estimated standard deviations for the NAIRU and concluded that these were very large. [42] The standard deviations are not usually calculated and/or disclosed in estimates of NAIRU but we can rely that they are normally quite large. This recommends caution in using NAIRU estimates for strict policy decisions.
A second aspect to underline is that it is difficult to accept that estimated NAIRUs are longterm constants determined exclusively by supply-side factors. This would correspond to the natural rate hypothesis (NRH) put forward by Friedman. This view of separating trend from cycle or supply from demand shocks has repeatedly been challenged, for example in the hysteresis hypothesis proposed by Blanchard and Summers.