Regional Beveridge Curves: A Latent Variable Approach

Robert Dixon, Guay Lim and John Freebairn

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: It is important to understand how labour markets in different regions are affected by 'common’ or 'national' shocks including national macroeconomic, monetary and fiscal policies. This paper applies a new econometric approach - involving an unobserved components model - to identify the direction and timing of the shifts in regional Beveridge Curves. The method allows for the presence of common national factor(s) and region specific factor(s) in the determination of activity in labour markets including regional specific loadings on the common factor. The method is applied to Australian data. The results show that equilibrium unemployment rate vary by region and over time. In terms of implications for policies to reduce unemployment, these results suggest a key potential role for regional policies.

Keywords: Beveridge curve; regional unemployment; unobserved components model (search for similar items in EconPapers)
JEL-codes: E32 R11 R12 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2010-09
New Economics Papers: this item is included in nep-geo
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Citations: View citations in EconPapers (4)

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http://melbourneinstitute.unimelb.edu.au/downloads ... series/wp2010n15.pdf (application/pdf)

Related works:
Journal Article: Regional Beveridge Curves: A Latent Variable Approach (2014)
Working Paper: Regional Beveridge Curves: A Latent Variable Approach (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2010n15

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