Tag: unemployment

The Phillips Machine may, in this era of super-computers modelling the economy, appear an outdated artefact. However, when it was first unveiled at the London School of Economics in 1949 it caused a sensation. The Phillips Machine is a model of the economy which uses water, pumps, valves and, in the case of the original, an electric motor scavenged from the windscreen wiper of a Lancaster bomber. For some photos of a Phillips Machine at the Science Museum, follow the links below:

Phillip’s Economic Computer (1949)
Enginuity article (Cambridge Engineering Department)

The computer model that once explained the British economy Guardian (8/5/08)
The computer model that once explained the British economy Guardian (8/5/08) (Cartoon)

Questions

1. Explain what is meant by the term ‘economic model’.
2. What were the limitations of the Phillips machine? Assess whether the Phillips machine could be of value to modern economists.
3. Discuss the value of economic models to policy makers when formulating economic policy.