Measuring labour market slack is essential for central banks: without full employment in the economy, inflation will not stay close to target. We propose a comprehensive approach to assessing labour market slack that reflects the complexity and diversity of the labour market.
Staff discussion papers
Staff working papers
Although the number of job applications has risen, job-finding rates remain relatively unchanged while job-separation rates have significantly declined. Rather than raising the probability of finding a job, we find that a rise in applications raises the probability of finding a good match, as evidenced by the decline in separation rates.