The Beveridge Curve

Eran Yashiv

CEP Discussion Papers from Centre for Economic Performance, LSE

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 (search for similar items in EconPapers)
JEL-codes: E24 E32 J63 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-lab, nep-ltv and nep-mac
Date: 2007-06
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