For example, if wages growth is low and not picking up materially at the current unemployment rate, we infer that this rate is above the NAIRU; the NAIRU must be lower than wherever we are now. We can also use statistical models to make this assessment, but in essence these are just more sophisticated approaches for making the same comparison.
These problems highlight the relevance of  6  BIS central bankers’ speeches  supervisory practices in determining banks’ capital requirements (for example, in validating internal banks’ models for calculating risk weights). Here, rigorous micro-prudential supervision is essential.