Cyclical Unemployment, Structural Unemployment

Diamond, Peter A.

doi:10.2139/ssrn.2211351

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Cyclical Unemployment, Structural Unemployment

MIT Department of Economics Working Paper No. 13-05

56 Pages Posted: 5 Feb 2013

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: January 15, 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.

Keywords: unemployment, vacancies, Beveridge Curve, matching function, stimulus policy

JEL Classification: E6, E24, E32, J23

Suggested Citation: Suggested Citation

Diamond, Peter A., Cyclical Unemployment, Structural Unemployment (January 15, 2013). MIT Department of Economics Working Paper No. 13-05, Available at SSRN: https://ssrn.com/abstract=2211351 or http://dx.doi.org/10.2139/ssrn.2211351