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Economic Brief

Oct. 22, 2021

Richmond Fed Research Examines the Dramatic Shift in the Beveridge Curve

The Beveridge curve captures an inverse relationship between the unemployment rate and the job opening rate. For most of the last two decades, the data lined up closely around such a relationship. According to the Richmond Fed’s latest Economic Brief, however, the COVID-19 pandemic changed the existing pattern dramatically.

Economist Thomas Lubik noted that the curve first shifted substantially outward during the onset of the pandemic. As the economy improved, the curve tilted steeply upward as the sharp increase in job openings outpaced the decline in the unemployment rate. Lubik noted that the extent of these changes is historically unprecedented. 

The Richmond Fed’s Economic Brief series provides essays on economic issues and trends. Sign up to receive an email notification when a new essay is posted.

As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District — including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia — to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.


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