BPEA | 1989 No. 1

The Beveridge Curve

Olivier Blanchard and
Olivier Blanchard C. Fred Bergsten Senior Fellow - Peterson Institute for International Economics
Peter A. Diamond
Discussants: Janet L. Yellen and
Janet Yellen headshot
Janet L. Yellen United States Secretary of the Treasury - United States Department of the Treasury, Former Distinguished Fellow in Residence - Economic Studies
Robert E. Hall
Robert Hall Headshot
Robert E. Hall Robert and Carole McNeil Joint Hoover Senior Fellow and Professor of Economics - Stanford University

1989, No. 1

OVER THE PAST thirty years, macroeconomists thinking about aggregate
labor market dynamics have organized their thoughts around two relations,
the Phillips curve and the Beveridge curve. The Beveridge curve,
the relation between unemployment and vacancies, has very much
played second fiddle. We think that emphasis is wrong. The Beveridge
relation comes conceptually first and contains essential information
about the functioning of the labor market and the shocks that affect it.