Sources: Swedish National Mediation Office, Swedish Public Employment Service and the Riksbank  Figure 5 indicates that this is not really the case during this period. Seen over the entire period, the correlation, if anything, is negative. If we look again at developments since 2011, the curve is almost horizontal, once again reflecting that wage increases have been low and stable. We have now looked at the correlations between wage increases and unemployment and between wage increases and the number of job openings. Let us complete the cycle and also study the third possible combination, that is, the correlation between the number of job openings and unemployment. The Beveridge curve shows how well the labour market is functioning The correlation between job openings, or job vacancies to be exact, and unemployment is another well-known curve within economics. It is called the Beveridge curve and like the Phillips curve was developed in 1958. In contrast to the Phillips curve, however, William Beveridge was not the originator of the curve, but a British economist who gave his name to the curve as a result of his commitment to labour issues such as unemployment and skills matching. The Beveridge curve is a way of measuring how well the labour market is functioning. It is reasonable to assume that when demand in the economy is high, the number of job openings rises while unemployment falls, and vice versa. The correlation should therefore be negative. But it is above all the position on the Beveridge curve that is interesting.
BIS central bankers’ speeches  7  The first is that one must of course have regulations in a monetary union that enable one to avoid a crisis of the proportions we are seeing now. This was what the creators of the union were thinking when they initiated the Stability and Growth Pact. However, the pact did not work very well and intensive discussions are therefore underway as to how it can be supplemented with new regulations that will guarantee that no members have excessive budget deficits or can build up excessive debt burdens. Hopefully these discussions will bear fruit. However, it is far from certain that the developments we are seeing now could have been avoided even if the Stability and Growth Pact had been upheld. Low interest rates have meant that not only governments, but also companies and households have built up their debt. But an efficient regulatory system would probably have made the crisis more manageable. A second conclusion is that when one refrains from the crisis resolution mechanism inherent in a national currency, one must replace it with something else. Because crises that entail concern over a member state’s creditworthiness are always a risk. One must have an institutional framework to manage the investors’ concerns regarding rising bond yields in, for instance, Italy now that there is no Italian currency that can depreciate and the Banca d’Italia cannot create the necessary liquidity.