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Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze the money supply. a. Download and graph monthly data for M1 (M1SL) and M2 (M2SL) for the period from 1990 to the present. Calculate the growth rate as the percentage change from the same month in the previous year. Describe the relationship between the […]

The following table shows the approximate daily rates of inflation from some of the worst hyperinflation episodes in history: A simple way of calculating the approximate amount of time it will take prices to double is to divide 70 by the growth rate; this is called the Rule of 70. For each of the hyperinflations shown

Hyperinflation reduces economic growth, both through resource misallocation and by reducing saving and investment. a. Why does hyperinflation cause misallocation of resources? b. Why does hyperinflation reduce saving and investment? c. What effects do the misallocation of resources and reduced saving and investment have on economic growth?

Use data from the World Bank (www.worldbank.org) to do the following: a. Find the correlation coefficient for M2 growth and consumer price growth for each country in the group of 10 high-income countries. b. Find the correlation coefficient for each country in the group of 10 low-income countries. c. Now find the correlation coefficient for

The World Bank (www.worldbank.org) hasdata on money growth rates for different countries. These data are listed under “Money and Quasi-Money” growth, which is roughly the same as M2 in the United States. Choose 10 countries to analyze. a. Which countries have the most rapid rates of money growth? The slowest? b. Compare the data on

Steve Hanke at the Cato Institute (www.cato. org/zimbabwe) has calculated a hyperinflation index for Zimbabwe and other countries suffering from hyperinflations. a. Where does Zimbabwe rank in Hanke’s index? How long did it take for prices to double at the peak of the hyperinflation? b. Search media sources to find out what the current state

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze the relationship between the money supply and inflation. a. Find the values for M1 (M1SL) and the personal consumption expenditure price index (PCEPI) from 1959 to the present. b. Calculate the year-over-year growth rate for each variable. c. In how many recessions does the

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze the money supply. a. Find the values from FRED for the M1 Money Stock (M1), the Currency Component of M1 (CURRENCY), and Total Checkable Deposits (TCD), from 1950 to the present. b. Plot the growth rate of M1, the currency component, and total checkable

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze the relationship between the money supply and inflation. a. Find the values for M1 (M1SL) and the personal consumption expenditure price index (PCEPI) from 1959 to the present. b. Calculate the year-over-year growth rate for each variable. c. In how many recessions does the

Using data from the St. Louis Federal Reserve(FRED) (http://research.stlouisfed.org/fred2/), analyze interest rates and inflation. a. Find the most recent values and values from the same month 5 years earlier from FRED for the the 10-Year Treasury Constant Maturity Rate (GS10), and the 10-Year Treasury Inflation-Indexed Security, Constant Maturity (FII10). b. Using the data found above,