The remarkable transformation of the UV curve in economic theory

The purpose of this paper is to provide an analysis of the impact the Unemployment-Vacancy (UV) curve (or Beveridge curve) had on economic theory and to provide an account of the subsequent radical changes in its place and role over the decades since its first appearance in 1958. The paper traces the historical development of the UV curve and argues that the role of the UV curve has changed from that of a measuring device, to a graphical representation of full employment, to an axiom necessary for matching models of unemployment to a diagnostic tool. This changing role is best understood in the light of the paradigmatic change from Keynesianism to neoclassical search theory.