The Beveridge Curve

Yashiv, Eran

doi:10.2139/ssrn.950928

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The Beveridge Curve

IZA Discussion Paper No. 2479

8 Pages Posted: 13 Dec 2006

See all articles by Eran Yashiv

Eran Yashiv

Tel Aviv University - Eitan Berglas School of Economics; CEP, LSE; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

There are 2 versions of this paper

Date Written: December 2006

Abstract

The Beveridge curve depicts a negative relationship between unemployed workers and job vacancies, a robust finding across countries. The position of the economy on the curve gives an idea as to the state of the labour market. The modern underlying theory is the search and matching model, with workers and firms engaging in costly search leading to random matching. The Beveridge curve depicts the steady state of the model, whereby inflows into unemployment are equal to the outflows from it, generated by matching.

Keywords: business cycle, job search, matching function, Phillips curve, unemployment, vacancies, wage inflation

JEL Classification: E24, E32, J63, J64

Suggested Citation: Suggested Citation

Yashiv, Eran, The Beveridge Curve (December 2006). IZA Discussion Paper No. 2479, Available at SSRN: https://ssrn.com/abstract=950928 or http://dx.doi.org/10.2139/ssrn.950928