A first lesson in econometrics. For fun.

Finished the mock referee report.

Read Chapter 1 in Pissarides (2000).The basic points are:

(1) Equilibrium is a triple (unemployment, tightness, real wage) that satisfies the flow equilibrium condition, the job creation condition and the wage equation.

(2) Equilibrium for tightness and wage: higher wage makes job creation less profitable and so leads to a lower ratio of jobs to workers; at higher market tightness the relative bargaining power shifts in favor of workers.

(3) Vacancy-unemployment space: the Beveridge curve is convex to the origin and the other curve is a line through the origin.