Capital values and job values

Key findings include: (i) complementarity between the hiring and investment processes; (ii) important cross effects of the value of capital on the mean and the volatility of the hiring rate, and vice versa; (iii) future returns are shown to play a dominant role in determining capital and job values; and (iv) U.S. labor market developments, including the outward shift of the Beveridge curve in the Great Recession and its aftermath 2007-2013, can be accounted for by changes in job and capital values. A relatively surprising finding is that job values went up, not down, in the Great Recession.