Meaning
Named after Beveridge (1944), with early evidence from Dow and Dicks-Mireaux (1958); cycles move along a downward-sloping curve.
Shifts
Blanchard and Diamond (1989) separated cyclical movements from shifts reflecting matching efficiency, linked to natural unemployment.
Theory and evidence
Pissarides (2000) grounded it in search and matching; Shimer (2005) raised a volatility puzzle; Elsby and colleagues (2015) survey the field. It complements the Phillips curve.
FAQ
- What is it in simple terms?
- More vacancies go with fewer unemployed, and vice versa.
- What does an outward shift mean?
- Worse matching: more unemployment for the same vacancies.
Sources reviewed: 2026-10-26
References
- Beveridge, W. H. (1944). Full employment in a free society. George Allen & Unwin. The namesake's work.
- Dow, J. C. R., & Dicks-Mireaux, L. A. (1958). The excess demand for labour: A study of conditions in Great Britain, 1946–56. Oxford Economic Papers, 10(1), 1–33. Early empirical study.
- Blanchard, O. J., & Diamond, P. (1989). The Beveridge curve. Brookings Papers on Economic Activity, 1989(1), 1–76. The key analysis.
- Pissarides, C. A. (2000). Equilibrium unemployment theory (2nd ed.). MIT Press. Search-and-matching foundations.
- Pissarides, C. A. (1985). Short-run equilibrium dynamics of unemployment, vacancies, and real wages. American Economic Review, 75(4), 676–690. Early matching-model dynamics.
- Shimer, R. (2005). The cyclical behavior of equilibrium unemployment and vacancies. American Economic Review, 95(1), 25–49. The Shimer puzzle.
- Elsby, M. W. L., Michaels, R., & Ratner, D. (2015). The Beveridge curve: A survey. Journal of Economic Literature, 53(3), 571–630. Comprehensive survey.