Piotr was talking today about Leshek Balcerowicz. (click on the link. We didn’t know who he was either :p )
He was proud of his shock therapy that turned Poland into the quickly developing country that is now.
But immediately, Piotr told us about the Phillips Curve, a concept that says the following: the lower the inflation rate, the higher unemployment rate.
And this turned on our curiosity. “So, ok… you have a very very low inflation rate, but what’s the unemployment rate in Poland?” Answer “It was around 20% in 2003”. WHAT???????????
So 1 in 5 Poles was unemployed???
* I already know that the Phillips Curve was empirical, and that nowadays it is not used by most economists ;) But there is a link between the two variables, even if the plot doesn’t follow the curve!
Musical background: Take That – Mancunian Way