Any assessment of the likelihood and characteristics of a soft landing should take into account the situation in the labor market currently and the likely dynamics in the labor market going forward. Modern labor market models centered around the Beveridge curve are a useful tool in this assessment

This paper presents a framework to interpret movements in the Beveridge curve and analyze unemployment fluctuations. We decompose the unemployment rate into three main components: (1) a component driven by changes in labor demand – movements along the Beveridge curve and shifts in the...