Morning Must-Read: Murat Tasci and Jessica Ice: Reassessing the Beveridge Curve “Shift” Four Years Later

Murat Tasci and Jessica Ice: Reassessing the Beveridge Curve “Shift” Four Years Later: “Early on in the current recovery…

…economists and policymakers were worried about a potential shift in the Beveridge curve…. Job vacancies were rising, but the unemployment rate was not declining, fueling a debate about a structural problem in the labor markets. Exactly four years ago, we… argued that it was too early to call what had happened a shift…. We concluded that the Beveridge curve behavior we were seeing in this recovery was typical of recoveries in general, and that the curve would likely follow its historical business-cycle pattern going forward, erasing any evidence of a shift. Well, four years later, we have 16 more quarterly data points to inform us…. It is safe to say that what seemed like a shift in the Beveridge curve ended up being another manifestation of the ‘normal’ dynamics of unemployment and vacancies in the United States…