Have you ever heard of the “hemline theory”? You know, the one that claims a woman’s hemline is directly correlated to how well the economy is performing?

What, haven’t heard this one before?

Watch CNN attempt to explain the theory:

The “hemline theory,” as Business Insider notes, was apparently introduced in the 1920′s by University of Pennsylvania Wharton School professor George Taylor. He noticed that during good economic times, “many women raised their skirts to show off their silk stockings. When times were bad, women lowered their skirts to hide that they weren’t wearing any,” ABC News reports.

“Like the stock markets, hemlines are going up and down daily and seasonally,” Ken Downing, the head of womenswear at Neiman Marcus, said.

Earlier this month, in an attempt to see if they could predict the future of the U.S. economy based on the hemline idea, writers at Business Insider decided that they would “conduct a full analysis” at New York fashion week by measuring 2,092 images from 25 designers and comparing year-on-year changes in the length of skirts and dresses.

What did they find? They discovered that, overall, hemlines are getting shorter. They were able to draw this conclusion by putting together a “Hemline Index.”

“The BI Hemline Index is calculated by measuring hem length as a percentage of the length from floor to waistline,” BI’s Eric Platt explains. “The shorter the hemline, the higher the index.”

According to his research, the average 2012 hemline registered at 44.38 — 9.34 points higher than the Fall/Winter 2011 collections.

“Complete looks from each designer were measured, however skirts and dresses were the only data points fed into the data set. Measurements were taken from images provided post-show,” Platt writes.

“On first glance, hemlines appeared to fall, with designers like Marc Jacobs showing little skin. However, when deconstructing outfits and measuring the skirts shown over pants, hemlines jumped. At Mr. Jacobs show for instance, the Hemline Index read at 45.6, compared to 41.1 last year,” he adds.

So, BI found that hemlines are getting shorter, which would indicate an improving economy. Of course, this is entirely dependent on whether or not the “hemline theory” is correct. Is it?

Let’s put it this way: if you think the “hemline theory” is total bunko, you’re not alone.

Do Shorter Hemlines Really Imply a Healthy Economy?If receding hemlines signal an improving economy, then what does whatever she’s wearing indicate? Hellooooo, recovery!

“It’s interesting, as a fashion director I no longer believe hemlines are a conversation on trend because it’s so particular to a designer and their point of view,” Downing said. “We are seeing hemlines below the knee, at the knee, and some that are still quite short.”

Amanda Brooks, fashion director at Barney’s, told BI that hemlines had moved both higher and lower on the runway this season.

“I would say in terms of the dress or skirt silhouette, it’s kind of anything goes right now,” Brooks said. “I wouldn’t say we’re seeing super short, to me what’s looking the most fresh personally is this mid-calf with a big slit up the front or an open vent.”

Writers at Jezebel were less than impressed with the theory:

Business Insider has not proved…that hemlines have any relationship whatsoever with the overall economy.

There are a number of problems with the “hemline index.” From the perspective of fashion, it represents a misunderstanding of the industry on several levels. The first and most obvious problem is that designers simply do not “set” hemlines. The time when American women were simply waiting for Big Fashion to tell them “how high” — if that time ever really existed — has not been a reality for more than a generation. Fashion is not a unified creative force; fashion critics haven’t been dispatched to the shows to find “the” hemline since the early 1970s, and fashion magazine editors do not sit around in their offices conspiring to make the American public Think Pink (or to Think Miniskirts).

Actually, they have a point. The BI report doesn’t really prove or disprove the theory. Furthermore, most designers would say they pay very little attention to the economy and mainly focus on whatever interests them.

“But that is hard to argue,” BI counters, “when designers almost unanimously moved to a black and neutral color palette as Lehman Brothers failed.”

Valerie Steele, acting director and chief curator of The Museum at the Fashion Institute of Technology in New York, would disagree.

“It’s a kind of functionalist theory of fashion that doesn’t work,” she said.

So, was there anything in the BI report indicating a possible correlation between shorter hemlines and healthy economies?

“The customer is definitely looking for something that will give her fashion credit in her wardrobe. This whole idea of when the economy went upside down that all that she would buy would be basics and there would be the return of the black turtleneck, was not what we saw in the luxury market,” Downing told Business Insider. ”She didn’t stop shopping, she just was not shopping as robust as she was before.”

For our part, we’ll stick to monitoring gun and ammo sales in order to gauge the health of the U.S. economy.

Do Shorter Hemlines Really Imply a Healthy Economy?For instance, we think the amount of ammunition purchased by this individual has single-handedly kept the U.S. out of full-blown recession