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Uploaded on Feb 21, 2009
First unveiled at the London School of Economics in 1949, the Phillips machine used hydraulics to model the workings of the British economy.
One early demonstration of the machine displayed the difficulties that can arise when monetary and fiscal policy are not synchronised. Phillips asked one of his students to be chancellor of the exchequer and control taxes and spending; the other to be governor of the Bank and control interest rates. Predictably, the policies were uncoordinated and the upshot was that water overflowed on to the floor.