Among Other Things, the Dollar
Wednesday Dec 26 2007
In the 19th century, a popular economic theory looked to the sun for economic forecasting. Economists who found a correlation between sunspot activity and the business cycle were convinced that the sun’s activity affected agriculture enough to influence the economic cycle. Since then, the term “sunspots” has taken on a new life in modern economics to describe random, external variables that have no direct effect on economics.
The value of the American dollar has been on a steady decline since 2002. In the last quarter of 2007, it reached parity with the Canadian “loonie” and saw a new low against the Euro. A slim dollar means many things for Americans. Among them is a slew of news stories about the nation’s failing economy, including the recent scare over a Jay-Z music video.
On this month’s shirt, two graphs with economic data—the value of the U.S. dollar and U.S. exports—are shown with a graph on sunspot activity. The numbers are pulled from the Federal Reserve, Census Bureau and NASA websites, respectively. Historical highs and lows from 1996 to 2007 are indicated in each area graph.
We’d like to thank Professor John Sarich for helping us frame this moment in America’s economic history within a larger, grander context.
Sources
- Foreign Exchange Rates — U.S. Federal Reserve
- Foreign Trade Statistics — U.S. Census Bureau
- The Sunspot Cycle — NASA
- The Dollar Is Falling, and That’s Good News — The New York Times
- Is Jay-Z signaling a recession? — Chaska Herald
- Correlation does not imply causation — Wikipedia
- Sunspots (economics) — Wikipedia
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This was an awesome topic for a shirt. Do you guys think you may do the Bhutto assassination? If you’re looking for weird conspiratorial connections like the sunspots, I think its really weird how close it happened to the Iowa primary.