Huh, having a little trouble in replying to this entry-- I hope it isn't deleted.
I dont know lists of ten principles of economics, so I can't speak to that. (I'm afraid that my visceral response is that it makes the course sound overly surveyish.)
The relationship Christine's instructor was talking about is called a Phillips curve, after the economist-- William Phillips-- whose 1958 article on it was the/an early work on it.
Here's what was going on. After the Great Depression and the Second World War, Keynesian macroeconomic was accepted (and applied awfully loosely in some cases) and theGood White Men were Remaking a Better World. (Of course both excellent and stupid things came out of this, typically not unmixed. That's the nature of the universe, humans, and human creations.) The U.N. was created to facilitate political coordination. The International Monetary Fund was created to coordinate international capital movements. World Bank was created to help direct investment in durables that facilitate production of goods and services (real capital). And in the United States, among other places economists and governments thought that through highly modern fine-tuning via fiscal and monetary policy, all nations could remain at full employment of labour and real capital forevermore.
Phillips noticed an empirical relationship between inflation rates and unemployment rates in which higher rates of inflation were positively correlated with lower rates of unemployment. This was an empirical observation without a theory, really. One proposed theory was the unemployed people didn't know the rate of inflation, so when they saw dollar-value wage/salary offers rising, they thought this meant wages and salaries that offered higher purchasing power than they'd seen before, and would accept them. (Though they had or might have rejected wages/salaries with the same actual purchasing power in a lower number of dollars, earlier.)
Some policy-makers thought the relationship would be a dandy one to exploit. However, it turned out that as policymakers kept trying to target an unemployment rate by means of an inflation policy, they seemed to have to keep moving to higher inflation rates.
Aha, said many, what's happening is that the story about fooled workers is correct. We just need to estimate inflations-augmented Phillips curves, so that a given Phillips curve applies only to a particular expected rate of inflation. the unemployment rate when actual and expected inflation rates are the same is the Non-Accelerating Inflation Rate of Unemployment.
And then classical economics, in which it is presumed that markets always clear, rose, and the NAIRU was whatever was in the news, and then classical economics further overtook Keynesian economics and economist got all about style and apparently largely lost interest in straightforward use of data. (Statistical analysis of macroeconomic data retained ritual power, and in fact that power increased.)
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timeasmymeasure
no subject
I dont know lists of ten principles of economics, so I can't speak to that. (I'm afraid that my visceral response is that it makes the course sound overly surveyish.)
The relationship Christine's instructor was talking about is called a Phillips curve, after the economist-- William Phillips-- whose 1958 article on it was the/an early work on it.
Here's what was going on. After the Great Depression and the Second World War, Keynesian macroeconomic was accepted (and applied awfully loosely in some cases) and theGood White Men were Remaking a Better World. (Of course both excellent and stupid things came out of this, typically not unmixed. That's the nature of the universe, humans, and human creations.) The U.N. was created to facilitate political coordination. The International Monetary Fund was created to coordinate international capital movements. World Bank was created to help direct investment in durables that facilitate production of goods and services (real capital). And in the United States, among other places economists and governments thought that through highly modern fine-tuning via fiscal and monetary policy, all nations could remain at full employment of labour and real capital forevermore.
Phillips noticed an empirical relationship between inflation rates and unemployment rates in which higher rates of inflation were positively correlated with lower rates of unemployment. This was an empirical observation without a theory, really. One proposed theory was the unemployed people didn't know the rate of inflation, so when they saw dollar-value wage/salary offers rising, they thought this meant wages and salaries that offered higher purchasing power than they'd seen before, and would accept them. (Though they had or might have rejected wages/salaries with the same actual purchasing power in a lower number of dollars, earlier.)
Some policy-makers thought the relationship would be a dandy one to exploit. However, it turned out that as policymakers kept trying to target an unemployment rate by means of an inflation policy, they seemed to have to keep moving to higher inflation rates.
Aha, said many, what's happening is that the story about fooled workers is correct. We just need to estimate inflations-augmented Phillips curves, so that a given Phillips curve applies only to a particular expected rate of inflation. the unemployment rate when actual and expected inflation rates are the same is the Non-Accelerating Inflation Rate of Unemployment.
And then classical economics, in which it is presumed that markets always clear, rose, and the NAIRU was whatever was in the news, and then classical economics further overtook Keynesian economics and economist got all about style and apparently largely lost interest in straightforward use of data. (Statistical analysis of macroeconomic data retained ritual power, and in fact that power increased.)