Sunday, January 24, 2016

With any luck, I'll embarrass somebody today

I was looking for the original paper on the Phillips curve from the November, 1958 issue of Economica. The Wiley Online Library has it here as a 17-page PDF.

From the end of the first section:
The purpose of the present study is to see whether statistical evidence supports the hypothesis that the rate of change of money wage rates in the United Kingdom can be explained by the level of unemployment and the rate of change of unemployment, except in or immediately after those years in which there was a very rapid rise in import prices, and if so to form some quantitative estimate of the relation between unemployment and the rate of change of money wage rates.

The periods 1861-1913, 1913-1948 and 1948-1957 will be considered separately.

The PDF includes these graphs:

Figure 1 by A. W. Phillips

Figure 9 by A. W. Phillips

Figure 11 by A. W. Phillips
Three graphs covering a span of nearly 100 years, from 1861 to 1957.

The same Google search turned up mtnotes_phillips.pdf (13 pages). It appears to be a paper from an Economics 403 course on monetary theory and policy. The parent page says This course requires Eco 212 (Principles of Macroeconomics). It's definitely not a beginner's class.

From part 1A of the pdf:
Phillips, an economist in Britian, plotted inflation vs. unemployment in Britian in the 1960’s.

I don't know what he did in the 1960s. But in 1958, the New Zealand-born Phillips published a study of unemployment and wage inflation covering the period from 1861 to 1957. The 1960s came later.

From part 1B of the pdf:
Primarily the data given by Phillips is just a few periods in the 1960s.

And again:
The original Phillips curve used a very small data set: just a decade.

No. The original Phillips curve looked at the period from 1861 to 1957.

Look, everybody makes mistakes. But the mtnotes pdf -- maybe "mtnotes" is short for "empty notes" -- the mtnotes pdf completely ignores the century of empirical data in which Bill Phillips found the relation that he wrote up in his 1958 paper.

No, the mtnotes guy doesn't just ignore that century of data. He makes up a story to convince us that there was no century of data. He tells a lie.

Is this the right way to do economics? The best lie wins?