Integrating the Empirical Tests of the Natural Rate Hypothesis: A Meta‐Regression Analysis

Summary A meta‐analysis of thirty‐four restriction tests from nine studies of the natural rate of unemployment hypothesis (NRU) finds the statistical trace of a false empirical hypothesis. A theme of bias and misspecification among those studies that tend to be more supportive of NRU emerges. When combined with a separate meta‐analysis of NRU's falsifying hypothesis, unemployment ‘hysteresis’ ( Stanley 2004a ), the natural rate hypothesis may be regarded as empirically ‘falsified’ ( Popper 1959 ). Monte Carlo simulations validate the meta‐regression methods used here to integrate different restriction tests and to identify their limitations.