Homework Assignment No. 4: due November 15, 2000

Use the data files for homework 1 [Eviews, or Excel] to analyze the following question. In Milton Friedman's Nobel lecture he proposed an important mechanism by which monetary policy could have real effects: Inflation uncertainty could be higher when inflation is higher.

Test this hypothesis using the time series data on U.S. CPI inflation rates and short-term interest rates from 1926-2000.

You should write a short, concise report that includes a minimum of computer output. Show only what is necessary.

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A full-text version of this assignment is available in Acrobat's portable data format (.pdf). The file is about 8K and can only be viewed (and printed) using a copy of Acrobat Reader.

If you do not have a copy of this program, you may download a program that works for Windows 95 or NT now [this is a self-extracting ZIP file that you must install on your computer to read PDF files]. If you are a Mac user, you might try installing the program for Macs now [this is a self-extracting binhex file that you must install on your computer to read PDF files]. If you want the current version of the Adobe Acrobat Reader for other platforms, visit Adobe's web page.

Click here to download the full text of this assignment.

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Click here to download the sample answer to this homework.

These calculations are contained in the Eviews file F533hw4A.WF1.

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Click here to see the histogram showing the grades for this quiz.

A histogram showing the grades for this homework is available in Acrobat's portable data format (.pdf). The file is about 4K and can only be viewed (and printed) using a copy of Acrobat Reader.

Click here to download this graph.

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