Mismatch in the labor market and inflation: an integrative model estimated for the spanish case during the great recession





Beveridge curve, Phillips curve, labor mismatch, inflation, labor market


The Great Recession has emphasized the need for different economic policies and structural reforms to boost economic growth and advanced emergent economies. This paper is founded on a relatively innovative theoretical concept: the Modified Output Gap (MOG). Based on the Phillips and Beveridge curves, the MOG reveals an explicitly positive relationship between the job vacancy rate and the inflation rate. Empirically, the relationship is estimated by developing three different panel data models: Fixed Effects (FE), Random Effects (RE) and Generalized Method of Moments (GMM). Results shows that a mismatch in the efficiency of the labor market combined with an increased demand in goods and services markets will increase inflation. This paper shows the empirical relevance of the modified output gap for Spain during the Great Recession and how it affects the implementation of the economic stimulus plan led by the Spanish government to boost the economy in this period.

Author Biographies

Santos M. Ruesga, Universidad Autónoma de Madrid (UAM), España

Doctor en Economía, catedrático de Economía Aplicada en el Departamento de Estructura Económica y Economía del Desarrollo, de la Universidad Autónoma de Madrid (UAM), España

Laura Pérez Ortiz, Universidad Autónoma de Madrid (UAM), España

Doctora en Economía, profesora ayudante en el Departamento de Estructura Económica y Economía del Desarrollo de la Universidad Autónoma de Madrid (UAM), España.

Friedrich L. Sell, Universitat der Bundeswehr München, Alemania

Doctor en Economía, catedrático de Macroeconomía y Política Económica en la Universitat der Bundeswehr München, Alemania.


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How to Cite

Mismatch in the labor market and inflation: an integrative model estimated for the spanish case during the great recession. (2018). Economía Y Sociedad, 23(54), 74-96. https://doi.org/10.15359/eys.23-54.6



Articles (Arbitrated section)

How to Cite

Mismatch in the labor market and inflation: an integrative model estimated for the spanish case during the great recession. (2018). Economía Y Sociedad, 23(54), 74-96. https://doi.org/10.15359/eys.23-54.6

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