Volume 9, Number 1, June 2019
| Confidence and the U.S. Beveridge Curve Puzzle |
De Chih Liu*
Abstract
The U.S. Beveridge Curve shift outward movement in 2000s is still a puzzle. This article investigated the possible linkage between confidence and Beveridge curve dynamics during 2001-2013 period. Based on Kalman filter approach, this study found that the confidence elasticity for unemployment was significantly negative (-1.146). The confidence also has a significant positive impact on vacancy (0.590). Importantly, this article found that the confidence has become stronger linkage with Beveridge curve since the 2007-2009 Great Recession.
Keywords: Beveridge Curve, Confidence, Kalman Filter
JEL Classification: D12, E12
* Department of Economics National, Taipei University, Taiwan.
E-mail: steveliu@mail.ntpu.edu.tw