David Altig and Ryan Avent join Robert Waldmann in saying: "don't panic about the Beveridge Curve--yet."
Ryan writes:
Labour markets: How structural is unemployment?: The Atlanta Fed's David Altig recently noted that this could indicate growing structural unemployment, and Minneapolis Fed president Narayana Kocherlakota went much further, declaring that most of existing unemployment is structural. But Mr Altig provides another view of the Beveridge curve that complicates the picture.... You can see the second quarter datapoint that looks like a departure from the usual line. But what you also see is that this departure is quite common in the early stages of recovery from a deep recession. This makes sense; early in recovery the ratio of job seekers to job openings is quite high. As a result the matching process takes longer; firms have more applicants to sort through and more time to select the ideal candidate.
