In an opinion column in the Wall Street Journal in 2018, Alan Blinder of Princeton University observed that the FOMC’s current estimate of the NAIRU was 4.5 percent. “That could be right. But a year ago the committee thought NAIRU was 4.7%, and three years ago it pegged it at 5.1%.”

a. What is the NAIRU?

b. Why are there disagreements over the value of the NAIRU?

c. Is it a problem for the Fed to not have a firm estimate of the NAIRU?