2. Go to the St. Louis Federal Reserve FRED database, and find data on the core PCE price index (PCEPILFE) and the spot price of a barrel of oil (WTISPLC). For both variables, convert the units setting to “Percent Change from Year Ago,” and download the data from 1960 to the most recent available data.

a. Identify periods in which oil price inflation is 80% or higher.

b. In the periods identified in part (a), how many months was oil price inflation 80% or higher? What was the average core inflation rate during each of those episodes?

c. Based on your answers to parts

(a) and

(b) above, what can you conclude about the credibility of more recent monetary policy compared to its credibility in the earlier periods?