The Beveridge curve in the macro labour market model: pedagogical advantages to explain the public policies
Autores: Capó Parrilla, Javier (Universitat de les Illes Balears, Departament d’Economia Aplicada, Facultad de Economía y Empresa. Cra. de Valldemossa, km 7.5. 07122 Palma (Illes Balears), España.)
Keywords: macroeconomics, Teaching, unemployment.
An easy version of the Diamond-Mortensen-Pissarides model fits in an undergraduate macroeconomics course and it is easily linkable with the PS-WS model determination of the equilibrium rate of unemployment. Putting the Beveridge curve does not create math difficulties in the model, it is able to be graphically represented and, the most important, it allows to copy the example of important economic facts and explain the operation and consequences of public labor policies. The determination of the equilibrium rate of unemployment from a simplified version of the Diamond-Mortensen-Pissarides model fits well into an undergraduate macroeconomics course, and it can be easily linked to the conventional version of the PS-WS model. Incorporating the Beveridge curve does not generate math difficulties in the model, it allows for simple graphical representations, and, most importantly, it makes it possible to replicate relevant behavioral aspects of the real economy, and to explain the workings and sometimes uncertain consequences of public labor policies.