Using the natural rate of unemployment to predict changes in inflation Suppose that the equation of the Phillips curve is

\[
\pi_{t}-\pi_{t}-1=4.0-0.32 \theta t
\]

Fill in the table below using the data collected in Question 7.

You will need to use a spreadsheet.

a. Is the Phillips curve able to properly predict changes in the price level over the whole time period?

b. Was the Phillips curve able to predict changes in the price level during the global financial crisis years that lasted from 2007 till 2009? Explain your answer.

c. Assess the ability of the expectations augmented Phillips curve to predict inflation during each of the global financial crisis of 2007-2009 as well as the European sovereign crisis of 2010-2015.

Data from question 7 Estimating the natural rate of unemployment To answer this question, you will need data on the annual French unemployment and inflation rates since 2000. Go to the English language Web site of the National Institute of Statistics and Economic Studies of France (http://www.insee.fr/en/ default.asp) to retrieve and download the annual data for the unemployment rate and inflation rate for France under the title "statistical indices and series." Select the data for the consumer price index as a measure of the retail price levels.

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Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Future years Inflation Unemployment Predicted change in inflation Predicted change in inflation minus actual change in inflation