Tuesday, February 28, 2012

Abbott and Costello have a go............

From Greg Mankiw's blog

COSTELLO: I want to talk about the unemployment
 rate in America.
ABBOTT: Good "subject". Terrible "times". It's about 9%.
COSTELLO: That many people are out of work?
ABBOTT: No, that's 16%.
COSTELLO: You just said 9%.
ABBOTT: 9% Unemployed.
COSTELLO: Right 9% out of work.
ABBOTT: No, that's 16%.
COSTELLO: Okay, so it's 16% unemployed.
ABBOTT: No, that's 9%...
COSTELLO: WAIT A MINUTE. Is it 9% or 16%?
ABBOTT: 9% are unemployed. 16% are out of work.
COSTELLO: If you are out of work you are unemployed.
ABBOTT: No, you can't count the "Out of Work" as the 
unemployed.  You have to look for work to be 
COSTELLO: But ... they are out of work!
ABBOTT: No, you miss my point.
COSTELLO: What point?
ABBOTT: Someone who doesn't look for work, can't be 
counted with those who look for work. It wouldn't be fair.
ABBOTT: The unemployed.
COSTELLO: But they are ALL out of work.
ABBOTT: No, the unemployed are actively looking for 
work...Those who are out of work stopped looking. They 
gave up. And, if you give up, you are no longer in the 
ranks of the unemployed.
COSTELLO: So if you're off the unemployment roles, 
that would count as less unemployment?
ABBOTT: Unemployment would go down. Absolutely!
COSTELLO: The unemployment just goes down because 
you don't look for work?
ABBOTT: Absolutely it goes down. That's how you get 
to 9%. Otherwise it would be 16%.  You don't want to read 
about 16% unemployment do ya?
COSTELLO: That would be frightening.
ABBOTT: Absolutely.
COSTELLO: Wait, I got a question for you. That means 
they're two ways to bring down the unemployment 
ABBOTT: Two ways is correct.
COSTELLO: Unemployment can go down if someone 
gets a job?
ABBOTT: Correct.
COSTELLO: And unemployment can also go down if 
you stop looking for a job?
ABBOTT: Bingo.
COSTELLO: So there are two ways to bring unemployment 
down, and the easier of the two is to just stop looking for 
ABBOTT: Now you're thinking like an economist.
COSTELLO: I don't even know what the hell I just said!

1 comment:

  1. Brilliant. As a big A&C fan, I think you really nailed that.