TY  - JOUR
AU  - Blanchard,Olivier Jean
AU  - Diamond,Peter A.
TI  - The Aggregate Matching Function
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3175
PY  - 1991
Y2  - April 1991
UR  - http://www.nber.org/papers/w3175
L1  - http://www.nber.org/papers/w3175.pdf
N1  - Author contact info:
Olivier J. Blanchard
International Monetary Fund
Economic Counsellor and Director
Research Department
700 19th Street, NW
Rm. 10-700
Washington DC, 20431
Tel: 202-623-7825
Fax: 202-623-7271
E-Mail: blanchar@mit.edu

Peter A. Diamond
15 Franklin Rd
Lexington, MA 02420
Tel: 617/253-3363
Fax: 617/253-1330
E-Mail: pdiamond@mit.edu
AB  - We present a picture of the labor market, one with large flows of jobs and workers, and matching. We develop a consistent approach to the interaction among those flows and the stocks of unemployed workers and vacant jobs, and to the determination of wages. We estimate the matching function, using both aggregate data and data from manufacturing and find evidence of a stable matching process in the data. We examine the joint movements in unemployment, vacancies and wages -the Beveridge and Phillips curve relations- in the light of our model. We conclude that aggregate activity shocks rather than reallocation shocks dominate the movement of unemployment.
ER  -