View Full Version : Phillips Curve Fun


Tiassa
11-05-07, 10:41 AM
It seems to be a growing phenomenon in the blogosphere. Some economic bloggers have asserted that a certain graph called a Phillips Curve shows a visual correlation to the country it describes.

http://strangemaps.files.wordpress.com/2007/11/jpcurve.png (http://strangemaps.wordpress.com/2007/11/04/200-japan-looks-like-its-phillips-curve/)
The Phillips Curve charts a historical regularity in
which unemployment and inflation are negatively correlated.
(StrangeMaps)

Marginal Revolution (http://www.marginalrevolution.com/marginalrevolution/2007/11/rorschach-econo.html) makes the point that the asserted correlation is nuts. Nonetheless, the novelty has attracted some attention. John Palmer, over at ElectEcon (http://www.eclectecon.com/posts/1193364742.shtml) considers the Phillips Curve in relation to Canada, and Pinus (http://pinus.bloguje.cz/612685-proc-je-phillipsova-krivka-pro-kazdou-zemi-jina.php) considers the Czech Republic.

What strikes me about this whole thing is that a couple of these folks appear to take the correlation seriously. For instance, Palmer even left a comment at Pinus that seems to, without sarcasm, call the correlation "a path-breaking discovery".

Should I be worried about economists on this point, or are they one of those groups of specialists that don't actually have much influence over the object of their study?

("Unemployment is up to 27%!" Yes, but if I remove one decimal place from this value and run the equation again, the graph looks like Ohio!)

I suppose there's a third option: that specialization has no specific or predictable relationship with discretion.

At any rate, have fun. Maybe we'll hear some new Illuminati theories soon.

Nikelodeon
11-05-07, 11:43 AM
cesspool.

TruthSeeker
11-08-07, 02:58 PM
:roflmao:

We all know economics is not a science....
Reminds me os string theory, btw.... :D

This smells like a confusion with correlation and causation.... :D

TruthSeeker
11-08-07, 03:02 PM
I think the following comment from the wesite says a lot about the author's level of seriousness on the subject of economics:

"C'est la vie; c'est la guerre; c'est la pomme de terre."

:D

GeoffP
11-08-07, 03:13 PM
cesspool.

+ 1