The Cyclical Behavior of the Gross Flows of U.S. Workers

Olivier Blanchard and

Olivier Blanchard C. Fred Bergsten Senior Fellow - Peterson Institute for International Economics @ojblanchard1

Peter A. Diamond

PAD

Peter A. Diamond

Discussants: Kevin M. Murphy and

KMM

Kevin M. Murphy University of Chicago

Robert E. Hall

Robert E. Hall Robert and Carole McNeil Joint Hoover Senior Fellow and Professor of Economics - Stanford University

THE U.S. LABOR MARKET is characterized by high rates of job creation and job destruction, and by large flows of workers into and out of employment. In a previous paper, we developed a conceptual framework to interpret the dynamic behavior of both the levels, or stocks, of employment, unemployment, and vacancies as well as the flows into and out of these states. At that time, we focused only on the behavior of stocks without examining the behavior of the flows themselves. In this paper, we intend to rectify that by refining and extending the pictures both of job creation and destruction, and of the flows of workers sketched in our earlier paper.