Observers have followed the Beveridge curve during the recession and the recovery to glean some insight into potential structural changes in the labor market. Whether or not a shift implies an actual structural change—specifically, a decline in the matching efficiency of the labor market—is still debatable. However, one thing is clear: there is no shift to begin with. We believe that this debate and the ensuing evidence showed us that inferences about complicated and ill-defined concepts such a structural change in the labor market cannot be made by just looking for a break in the simple (and reduced-form) empirical relationships between macroeconomic aggregates in the midst of a deep and long recession.
Chosen excerpts by Job Market Monitor. Read the whole story at Reassessing the Beveridge Curve “Shift” Four Years Later :: Murat Tasci and Jessica Ice :: Economic Trends :: 09.05.14 :: Federal Reserve Bank of Cleveland.
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