International Journal of Performance Measurement





Volume 9, Number 1, June 2019

Confidence and the U.S. Beveridge Curve Puzzle

De Chih Liu*


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.