Not that I put a great deal of confidence in regression analysis, but I still thought that these results that I got on U.S. inflation and unemployment data since 1961 were kind of interesting. Most of this should be pretty self-explanatory (if you are familiar with regression analysis, at least); the Party variable =1 in years with Democratic presidents and =0 in years with Republican presidents. Overall, they all seem to indicate a vertical long-run Phillips curve, with the "long-run" being about a year. Comments, anyone? ---------------------------------------------------------------------- Regressing unemployment on constant and inflation yields Beta = 5.617 0.105 Standard errors= 0.522 0.088 R-squared = 0.045 Regressing inflation on constant and unemployment yields Beta = 2.382 0.431 Standard errors= 2.288 0.361 R-squared = 0.045 Regressing unemployment on constant, inflation, lagged inflation, and lagged unemployment yields Beta = 1.372 -0.171 0.364 0.620 Standard errors= 0.532 0.066 0.067 0.082 R-squared = 0.853 Implicit estimate of natural rate of unemployment = 3.611 Regressing unemployment on constant, inflation, and lagged inflation Beta = 5.003 -0.347 0.573 Standard errors= 0.402 0.108 0.105 R-squared = 0.540 Regressing unemployment on constant, inflation, and lagged unemployment Beta = 0.561 0.127 0.805 Standard errors= 0.727 0.053 0.106 R-squared = 0.691 Implicit estimate of natural rate of unemployment = 2.870 Regressing unemployment on constant, inflation, inf(t-1), and inf(t-2) Beta = 4.512 -0.197 0.197 0.321 Standard errors= 0.405 0.108 0.156 0.106 R-squared = 0.660 Regressing unemployment on constant and lagged unemployment Beta = 1.247 0.800 Standard errors= 0.720 0.114 R-squared = 0.628 Implicit estimate of natural rate of unemployment = 6.219 Regressing unemployment on constant, inflation, Party, inf(t-1), un(t-1) Beta = 1.563 -0.153 -0.297 0.338 0.612 Standard errors= 0.556 0.068 0.261 0.070 0.082 R-squared = 0.860 Implicit estimate of natural rate of unemployment = 4.026 Regressing unemployment on constant, Party, and lagged unemployment Beta = 1.831 -0.744 0.747 Standard errors= 0.726 0.355 0.109 R-squared = 0.677 Implicit estimate of natural rate of unemployment = 7.240 Regressing unemployment on constant, Party, lagged Party, inflation, and lagged unemployment Beta = 1.346 -0.308 -0.505 0.127 0.726 Standard errors= 0.777 0.545 0.557 0.051 0.108 R-squared = 0.742 Implicit estimate of natural rate of unemployment = 4.915 Regressing inflation on constant, lagged inflation, and unemployment yields Beta = 4.762 1.016 -0.780 Standard errors= 1.249 0.120 0.242 R-squared = 0.735 Regressing unemployment on constant, inflation-lagged inflation, and lagged unemployment yields Beta = 2.091 -0.263 0.664 Standard errors= 0.703 0.087 0.112 R-squared = 0.722 Implicit estimate of natural rate of unemployment = 6.224 Regressing unemployment on constant, inflation(t), inflation(t-1), inflation(t-2), unemployment(t-1), and unemployment(t-2) yields Beta = 1.255 -0.210 0.420 -0.019 0.521 0.122 Standard errors= 0.636 0.083 0.114 0.102 0.230 0.175 R-squared = 0.857 Implicit estimate of natural rate of unemployment = 3.508