Cyclical Unemployment, Structural Unemployment

Diamond, Peter A.

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Cyclical Unemployment, Structural Unemployment

NBER Working Paper No. w18761

57 Pages Posted: 2 Feb 2013 Last revised: 7 Apr 2023

See all articles by Peter A. Diamond

Peter A. Diamond

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

There are 4 versions of this paper

Date Written: February 2013

Abstract

Whenever unemployment stays high for an extended period, it is common to see analyses, statements, and rebuttals about the extent to which the high unemployment is structural, not cyclical. This essay views the Beveridge Curve pattern of unemployment and vacancy rates and the related matching function as proxies for the functioning of the labor market and explores issues in that proxy relationship that complicate such analyses. Also discussed is the concept of mismatch.

Suggested Citation: Suggested Citation

Diamond, Peter A., Cyclical Unemployment, Structural Unemployment (February 2013). NBER Working Paper No. w18761, Available at SSRN: https://ssrn.com/abstract=2210780