Data: Analyzing, Interpreting, and Reporting’ The Federal Reserve’s mandate is g

For This or a Similar Paper Click Here To Order Now

Data: Analyzing, Interpreting, and Reporting’
The Federal Reserve’s mandate is generally interpreted as an attempt to achieve an
unemployment rate that is as close as possible to the natural rate and inflation that is close to 2%
(personal consumption expenditure price inflation).
Go to the St. Louis Federal Reserve FRED database, and find the following data:
https://fred.stlouisfed.org/
1.
Personal consumption expenditure price index (PCECTPI)
2. The unemployment rate (UNRATE)
3. Natural rate of unemployment (NROU)
For the price index, adjust the units to “Percent Change from a Year Ago” to convert the data to
the inflation rate; for the unemployment rate, change the frequency setting to
“Quarterly.”
1. Download the data into a spreadsheet.
2.
Calculate the unemployment gap and inflation gap for each quarter.
3.
Then, using the inflation gap, create an average inflation gap measure by taking the
average of the current inflation gap and the gaps for the previous three quarters.
4.
Now apply the following (admittedly arbitrary and ad hoc) test to the data from 2000:
First Quarter (Q1) through the most recent data available: If the unemployment gap is
larger than 1.0 for two or more consecutive quarters, and/or the average inflation gap is
larger in absolute value than 0.5 for two or more consecutive quarters, consider the
mandate “violated.”
Locate and read at least five articles on the mandates of the Federal Reserve Bank: The need for
the mandate, inherent conflicts, compare Fed’s mandates to other central banks. The Federal
Reserve Banks should have accessible articles on the subject at their sites or do a google scholar
search for articles. This should serve as your introduction to the essay.
Write a fifteen-page essay describing what you are doing, why you are doing it, what you expect
to find, what you found, how your expectations and your findings are the same or not.
In your essay be sure to cover the points listed below.
1. Based on this ad hoc test, in which quarters did the Fed “violate” the price stability
portion of its mandate? Explain.
2. In which quarters did the Fed “violate” the maximum employment mandate? Explain.
3. Is the ssFed currently “in violation” of its mandate? Explain.

For This or a Similar Paper Click Here To Order Now