These alternative moving averages translate into a range of 1/2 to 1-1/2 percentage points for the direct disinflationary effect of the acceleration in productivity growth. I use this range of estimates to calibrate the range for the decline in the short-run NAIRU in Figure 3.
5  BIS Review 91/2000  Figure 3 The unemployment rate and alternative estimates of the NAIRU  In Figure 3, I have assumed that the long-run NAIRU is 5-1/2 percent and that the long-run NAIRU has varied over the period from 1960 until today only in response to the effect of demographic changes on the average unemployment rate.4 As I explain in somewhat more detail in the appendix, I estimate the short-run NAIRU by subtracting the direct disinflationary effect of changes in trend productivity from the estimate of the long-run NAIRU.