 Is there a Beveridge curve in the short and the long run?Journal of Applied Economics, 2017, vol. 20, 283-303 Abstract: The theoretical Beveridge curve has a negative slope and is convex to the origin, a relationship most often associated to the short run. However, search and matching theory indicates that certain shocks may affect unemployment and vacancies in the same way. I trace the effects of both types of shocks affecting the vacancy rate and the unemployment rate using U.S. data. I impose common factor restrictions in an unobserved component model and sign restrictions in a vector autoregressive model. I derive negatively and positively-correlated components of vacancies and unemployment. The negatively-sloped Beveridge curve is the result of an aggregate labour demand shock. This shock also causes some more long-lasting effects for vacancies and unemployment, the ‘loops’ around the Beveridge curve. The shock that creates a positive co-movement between vacancies and unemployment is due to matching efficiency and job destruction. This positive co-movement occurs after recessions and in the long run. Keywords: Beveridge curve; unemployment types; unobserved components; common trends (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cem:jaecon:v:20:y:2017:n:2:p:283-303 Access Statistics for this article Journal of Applied Economics is currently edited by Germán Coloma and Mariana Conte Grand and Jorge M. Streb More articles in Journal of Applied Economics from Universidad del CEMA Contact information at EDIRC. |
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