Labor Market Dynamics During the 2021-24 Inflation Surge

Andres Blanco

Policy Hub, 2025, vol. 2025, issue 3

Abstract: This paper revisits the common interpretation that the surge in the vacancy-tounemployment ratio during the 2021–24 inflation episode primarily reflected an overheated labor market. Instead, I argue that the increase in vacancies relative to unemployment was largely driven by falling real wages and a rise in job-to-job transitions, as workers sought to recover lost purchasing power, rather than by broad-based labor market overheating.

Keywords: inflation surges; market tightness; fiscal and monetary policy (search for similar items in EconPapers)
JEL-codes: E43 E52 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:fip:a00068:101161

DOI: 10.29338/ph2025-03

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