Phillips Curve

May 10, 2019 The “Phillips Curve” Has Never Lied, but People Currently Are – either unemployment is low or inflation/interest rates are low – but both CANNOT BE LOW AT THE SAME TIME!!!

The “Phillips Curve” is a complex calculation that results in a curved on a graph between the rate of unemployment, and the inflation rate, often co-related by interest rates.

Here is what a simplified “Phillips Curve” actually looks like:

As is indicated on this “Phillips Curve” graph when unemployment is low inflation ought to be higher, and this is usually achieved by raising interest rates in an effort to offset low unemployment. The inverse occurs when unemployment is high interest rates ought to be much lower to then stimulate the economy.

The Phillips Curve never lies – only people lie.

That means as we currently have both low inflation/interest rates, as well as low unemployment, then one of those numbers is being incorrectly reported.

As we can all see the inflation rates as represented via interest rates and they are relatively low, then the TRUE unemployment rate must quite high. There is no other logical narrative for this phenomenon – other than the TRUE unemployment rate is considerably higher than what is currently being reported by the Department of Labor!

The opinion here is: The U.S. Unemployment Rate is being GREATLY UNDER-REPORTED!

The Officials of the U.S. Government would never LIE now would they?

 

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