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Tuesday, March 29, 2011

Striking Scatterplot: Unemployment and Investment

Via Greg Mankiw:

A Striking Scatterplot:
This graphic is from John Taylor, who plots it using quarterly seasonally adjusted data from 1990Q1 to 2010Q3. Investment here is fixed investment. 
Of course, causality goes in both directions: Strong investment demand leads to lower unemployment, and a stronger economy, reflected in lower unemployment, encourages investment spending. As a result, the interpretation of this scatterplot can be debated. But there is no doubt that the strength of the correlation is impressive.

    Posted by on Tuesday, March 29, 2011 at 12:42 PM in Economics, Unemployment | Permalink  Comments (88)


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