1. In the past few short months, inflation rates in Canada and around the world have suddenly shot up. Is today's inflation rate as high as it seems, when we put it in historical perspective? To help you answer this question, I retrieved data from Statistics Canada Table 18-10-004-01, which contains monthly data on the Consumer Price Index (CPI), not seasonally adjusted, from January 1914. I collapsed the monthly data for the All-items CPI to quarterly data by taking the average over the three months of each quarter. Then I computed the year-over-year inflation rate for each quarter. The file "Inflation_June_2022.xlsx" contains the resulting quarterly data on the year-over-year inflation rate for the period 1915Q1 to 2022Q1. 1 a. Construct a time plot of the quarterly inflation rate data. Make sure that your graph has an informative title and that the axes are labelled. (10 marks) b. Compute the mean, median, variance, standard deviation, mean absolute deviation, coefficient of variation, minimum, maximum, and range of the quarterly inflation rates for the entire period from 1915Q1 to 2022Q1. Round the values of variance, standard deviation, mean absolute deviation, and coefficient of variation to two decimal places; round all the other statistics to one decimal place. (15 marks) In 1991, with the approval of the Minister of Finance the Bank of Canada implemented an inflation target to guide its policy in subsequent years. Its objective was to bring the rate of inflation down to 2% by the end of 1995, and to keep it at 2% thereafter. Compute the same descriptive statistics as in part b for the post-1995 period (1996Q1-22Q1). (15 marks) d. Suppose that you work for BMO Economics and have been asked to prepare a brief report that places the current rate of inflation in historical perspective, as well as the extent to which the Bank of Canada has been successful in meeting its self-imposed inflation target. Your report should discuss all of the calculations and graphs of parts a-c. (25 marks) C. change in the CPI between the same quarter in two adjacent Damen 1915 9 A4 B C 1 Rate of inflation -- CPI All-items 2 Year-over-year percentage change, by quarter 3 Canada, 191501-202201 4 5 6 Period. 7 8 191501 9 191502 10 191503 11 191504 12 191601 13 191602 14 191603 15 191604 16 191701 17 191702 18 191703 19 191704 20 191801 Inflation rate 21 191802 22 191803 23 191804 24 191901 25 1919Q2 26 1919Q3 27 191904 28 192001 29 192002 30 192003 31 192004 32 192101 33 192102 34 192103 X fx 35 192104 36 192201 37 192202 38 192203 39 192204 40 192301 41 192302 42 1923na 72226 1.7 22112 2.2 2.2 2.1 6.1 7 9.3 13.5 15.5 D 19.9 19.9 164 13.8 11.1 13.8 13.9 10.9 10.3 9.1 7.8 15.3 20.5 17.5 122 -0.9 -13.8 -16.9 -162 136 -84 -55 -3.2 -0.8 08 E G A 192301 192302 192303 192304 192401 5 192402 6 192403 7 192404 8 192501 19 192502 50 1925Q3 51 192504 52 1926Q1 53 192602 54 1926Q3 55 192604 56 192701 57 192702 58 192703 59 192704 60 192801 61 192802 62 192803 63 192804 64 192901 65 192902 66 1929Q3 67 192904 68 193001 69 1930Q2 70 193003 71 193004 72 193101 73 1931Q2 74 193103 75 193104 76 193201 77 193202 78 193203 79 193204 80 193301 81 193302 82 193303 4.8 B -0.8 88 0.8 0 0 -0.3 -3.3 -2.6 -1.4 0 1.5 16 1.8 0 1.9 1.4 -0.3 -0.3 -2.2 -1.8 -1.4 0 0.3 1.1 1.4 0.3 1.6 0.8 14 1.8 0.3 -1.1 -4.9 -8.2 -98 -10.7 -10.9 -10.8 -10 -9 -7.6 -65 -5 -31 Data Q1 C O FENG & GUTUBROTU D G 2 193303 3 193304 41934Q1 35 193402 36 193403 37 193404 88 193501 89 193502 90 1935Q3 91 193504 92 193601 93 193602 94 1936Q3 95 193604 96 1937Q1 97 193702 98 193703 99 193704 100 193801 101 193802 102 193803 103 193804 104 193901 105 193902 106 193903 107 193904 108 194001 109 194002 110 194003 111 194004 112 194101 113 194102 114 194103 115 194104 116 1942Q1 117 1942Q2 118 194203 119 194204 120 194301 121194302 122 194303 123 194304 124 194401 Wi B -3.1 -27 0.8 1.8 0.4 1.4 -0.4 -0.4 0.4 2.4 2.8 14 2.4 1.8 2.7 4.1 3.6 4 1.7 1.7 1.3 -2.6 -1.7 -1,7 -2.2 2.6 3 3.9 5.7 4.2 4.7 4.7 7.1 7.4 6.5 6.4 3.1 2.7 0.8 23 2.9 2.6 3.4 Data Q1 C O D E F 194304 194401 1944Q2 5194403 7194404 8 194501 9194502 30 194503 31 194504 32 194601 33 194602 34 194603 135 194604 136 194701 137 1947Q2 138 1947Q3 139 194704 140 1948Q1 141 1948Q2 142 194803 143 194804 144 194901 145 194902 146 1949Q3 147 194904 148 195001 149 195002 150 195003 151 195004 152 1951Q1 153 195102 154 195103 155 195104 156 1952Q1 157 1952Q2 158 1952Q3 159 195204 160 195301 161 195302 26 34 11 -0.3 -14 -0.3 0.3 1.1 14 14 1.5 4 77924NGAN AT 5.4 5.8 8.6 8.7 12.7 16.4 15.5 14.7 10.7 6.8 1.4 0.8 1.7 3 5.1 8.4 11.4 11.7 10.6 8.1 3.1 0.7 -1.2 -21 -1.6 Data Q1 jrubials 63 195304 164 195401 165 195402 166 195403 167 195404 168 195501 169 195502 170 1955Q3 171 195504 172 195601 173 195602 174 1956Q3 175 195604 176 1957Q1 177 195702 178 195703 179 195704 180 195801 181 195802 182 195803 183 195804 184 195901 185 1959Q2 186 1959Q3 187 195904 188 196001 189 1960Q2 190 196003 191 1960Q4 192 1961Q1 193 196102 194 1961Q3 195 1961Q4 196 1962Q1 197 196202 198 1962Q3 199 1962Q4 200 196301 OOOC 525C 102 T HARD THIM -0.5 0.2 0.5 0.9 1 0.3 0.2 0.5 -0.3 0.2 OO OOOONN3 NO 0.2 0.5 2.1 2.6 3.3 4 3.3 2.7 2.9 2.5 1.8 2.2 1.6 0.7 1.3 1.3 1.3 2 0.8 1.3 15 13 13 0 0 08 15 19 19 Data Q1 2.3 + 196302 196303 196304 196401 196402 1964Q3 7196404 8 196501 9196502 0 196503 1196504 2 196601 13/196602 14 196603 15 196604 16 196701 17 196702 18 196703 219 196704 220 196801 221 1968Q2 222 196803 223 196804 224 196901 225 1969Q2 226 1969Q3 227 196904 228 197001 229 1970Q2 230 197003 231 197004 232 1971Q1 233 1971Q2 234 197103 235 197104 236 197201 237 197202 238 197203 239 197204 Th 190938063348881513414334 1.7 2.5 1.7 2.3 24 2.8 3.7 3.8 5.4 4.7 4.4 5 3.4 3 2 13 21 31 42 5 47 51 52 Data Q1 E F G 197301 197302 197303 197304 197401 5197402 5197403 7197404 8 1975Q1 9 197502 0 197503 51 197504 52 197601 53 197602 54 197603 55 197604 56 1977Q1 57 197702 58 197703 259 197704 260 197801 261 1978Q2 262 197803 263 197804 264 197901 265 1979Q2 266 1979Q3 267 197904 268 198001 269 198002 270 198003 271 198004 272 198101 273 198102 274 198103 275 198104 276 198201 277 198202 278 198203 5.7 7.1 7.9 9.1 9.7 11.1 11 12.1 11.6 10.5 10.8 9.9 9.5 8.4 6.6 5.9 6.6 7.8 8.4 9.1 9 8.8 9.2 8.8 9 94 88 94 9.5 9.5 10.5 11 12.3 12.5 127 123 114 116 106 Data Q1 + F G 279 198204 280 198301 281 198302 282 198303 283 198304 284 198401 285 198402 286 198403 287 198404 288 1985Q1 289 198502 290 198503 291 198504 292 198601 293 198602 294 1986Q3 295 198604 296 1987Q1 297 1987Q2 298 198703 299 1987Q4 300 198801 301 198802 302 198803 303 198804 304 1989Q1 305 1989Q2 306 1989Q3 307 1989Q4 308 199001 309 199002 310 199003 311 199004 312 199101 313 199102 314 199103 315 199104 316 199201 317 199303 6619 TL 007 CALLMONTT652 9.6 7.7 - 5.9 5.3 4.7 5.1 4.6 3.8 3.7 3.6 4 4.1 4.1 4.3 3.9 4.2 44 4 4.6 45 4.2 4.1 4 4 4.1 4.5 4.9 5.3 52 54 46 41 5 64 62 58 41 16 + 318 199203 319 199204 320 199301 321 199302 322 199303 323 199304 324 199401 325 199402 326 199403 327 199404 328 199501 329 1995Q2 330 1995Q3 331 199504 332 199601 333 199602 334 1996Q3 335 199604 336 1997Q1 337 1997Q2 338 1997Q3 339 199704 340 1998Q1 341 199802 342 1998Q3 343 1998Q4 344 199901 345 1999Q2 346 1999Q3 347 199904 348 200001 349 200002 350 200003 351 200004 352 200101 353 200102 354 200103 355 200104 356 200201 acminns B 12 1.8 21 18 1.7 1.8 0.5 0 0.2 0 1.5 2.7 2.3 122 2 15 1.4 1.4 2 2.1 1.6 1.7 1 1 N 1 0.8 1.1 OP 186 0.8 1.6 2.2 2.4 26 2.4 2.7 3.1 2.8 3.6 2.7 1.1 1.6 + D M A4 357 200202 358 200203 359 200204 360 200301 361 200302 362 200303 363 200304 364 200401 365 200402 366 200403 367 200404 368 200501 369 200502 370 200503 371 200504 372 200601 373 200602 374 200603 375 200604 376 200701 377 200702 378 200703 379 200704 380 200801 381 200802 382 200803 383 200804 384 200901 385 200902 386 2009Q3 387 200904 388 201001 389 201002 390 201003 201004 392 201101 393 201102 394 201103 395 201104 B 14 23 3.8 4.5 2.8 21 1.7 0.9 2.2 2 2.3 2.1 1.9 2.6 2.2 2.4 2.6 1.7 1.4 1.8 2.2 2.1 2.4 1.8 2.4 3.4 1.9 1.2 0.1 -0.9 0.8 1.6 1.4 1.8 2.3 2.6 3.4 3 27 Data Q1 F D E ( 396 201201 397 201202 398 201203 399 201204 400 201301 401 201302 402 201303 403 201304 404 201401 405 201402 406 201403 407 201404 408 201501 409 201502 410 201503 411 201504 412 201601 413 201602 414 201603 415 201604 416 201701 417 2017Q2 418 201703 419 201704 420 201801 421 201802 422 201803 423 201804 424 201901 425 201902 426 2019Q3 427 201904 428 202001 429 202002 430 202003 431 202004 432 202101 433 202102 434 202103 insane 23 16 12 0.9 0.9 0.8 11 0.9 14 22 21 1.9 11 0.9 1.2 1.3 1.5 1.5 1.2 524 1.4 1.9 1.3 1.4 1.8 2.1 2.3 2.7 2 16 2.2 1.9 2.1 1.8 0 0.3 0.8 14 34 4.1 Data Q1 + E 2 A4 411 201504 412 201601 413 201602 414 201603 415 201604 416 201701 417 2017Q2 418 201703 419 201704 420 201801 421 201802 422 2018Q3 423 201804 424 2019Q1 425 201902 426 2019Q3 427 201904 428 202001 429 202002 430 202003 431 202004 432 202101 202102 434 202103 435 202104 436 2022Q1 437 438 439 440 X fx B 1.3 3552 1.5 15 1.2 14 19 TALLINN N 34 L3INOND 0 0 3 A4LT 1.3 1.4 1.8 21 2.3 2.7 2 1.6 2.2 19 2.1 1.8 0.3 0.8 1.4 34 WI 4.1 4.7 5.8 C BIU - - - A + E L 1. In the past few short months, inflation rates in Canada and around the world have suddenly shot up. Is today's inflation rate as high as it seems, when we put it in historical perspective? To help you answer this question, I retrieved data from Statistics Canada Table 18-10-004-01, which contains monthly data on the Consumer Price Index (CPI), not seasonally adjusted, from January 1914. I collapsed the monthly data for the All-items CPI to quarterly data by taking the average over the three months of each quarter. Then I computed the year-over-year inflation rate for each quarter. The file "Inflation_June_2022.xlsx" contains the resulting quarterly data on the year-over-year inflation rate for the period 1915Q1 to 2022Q1. 1 a. Construct a time plot of the quarterly inflation rate data. Make sure that your graph has an informative title and that the axes are labelled. (10 marks) b. Compute the mean, median, variance, standard deviation, mean absolute deviation, coefficient of variation, minimum, maximum, and range of the quarterly inflation rates for the entire period from 1915Q1 to 2022Q1. Round the values of variance, standard deviation, mean absolute deviation, and coefficient of variation to two decimal places; round all the other statistics to one decimal place. (15 marks) In 1991, with the approval of the Minister of Finance the Bank of Canada implemented an inflation target to guide its policy in subsequent years. Its objective was to bring the rate of inflation down to 2% by the end of 1995, and to keep it at 2% thereafter. Compute the same descriptive statistics as in part b for the post-1995 period (1996Q1-22Q1). (15 marks) d. Suppose that you work for BMO Economics and have been asked to prepare a brief report that places the current rate of inflation in historical perspective, as well as the extent to which the Bank of Canada has been successful in meeting its self-imposed inflation target. Your report should discuss all of the calculations and graphs of parts a-c. (25 marks) C. change in the CPI between the same quarter in two adjacent Damen 1915 9 A4 B C 1 Rate of inflation -- CPI All-items 2 Year-over-year percentage change, by quarter 3 Canada, 191501-202201 4 5 6 Period. 7 8 191501 9 191502 10 191503 11 191504 12 191601 13 191602 14 191603 15 191604 16 191701 17 191702 18 191703 19 191704 20 191801 Inflation rate 21 191802 22 191803 23 191804 24 191901 25 1919Q2 26 1919Q3 27 191904 28 192001 29 192002 30 192003 31 192004 32 192101 33 192102 34 192103 X fx 35 192104 36 192201 37 192202 38 192203 39 192204 40 192301 41 192302 42 1923na 72226 1.7 22112 2.2 2.2 2.1 6.1 7 9.3 13.5 15.5 D 19.9 19.9 164 13.8 11.1 13.8 13.9 10.9 10.3 9.1 7.8 15.3 20.5 17.5 122 -0.9 -13.8 -16.9 -162 136 -84 -55 -3.2 -0.8 08 E G A 192301 192302 192303 192304 192401 5 192402 6 192403 7 192404 8 192501 19 192502 50 1925Q3 51 192504 52 1926Q1 53 192602 54 1926Q3 55 192604 56 192701 57 192702 58 192703 59 192704 60 192801 61 192802 62 192803 63 192804 64 192901 65 192902 66 1929Q3 67 192904 68 193001 69 1930Q2 70 193003 71 193004 72 193101 73 1931Q2 74 193103 75 193104 76 193201 77 193202 78 193203 79 193204 80 193301 81 193302 82 193303 4.8 B -0.8 88 0.8 0 0 -0.3 -3.3 -2.6 -1.4 0 1.5 16 1.8 0 1.9 1.4 -0.3 -0.3 -2.2 -1.8 -1.4 0 0.3 1.1 1.4 0.3 1.6 0.8 14 1.8 0.3 -1.1 -4.9 -8.2 -98 -10.7 -10.9 -10.8 -10 -9 -7.6 -65 -5 -31 Data Q1 C O FENG & GUTUBROTU D G 2 193303 3 193304 41934Q1 35 193402 36 193403 37 193404 88 193501 89 193502 90 1935Q3 91 193504 92 193601 93 193602 94 1936Q3 95 193604 96 1937Q1 97 193702 98 193703 99 193704 100 193801 101 193802 102 193803 103 193804 104 193901 105 193902 106 193903 107 193904 108 194001 109 194002 110 194003 111 194004 112 194101 113 194102 114 194103 115 194104 116 1942Q1 117 1942Q2 118 194203 119 194204 120 194301 121194302 122 194303 123 194304 124 194401 Wi B -3.1 -27 0.8 1.8 0.4 1.4 -0.4 -0.4 0.4 2.4 2.8 14 2.4 1.8 2.7 4.1 3.6 4 1.7 1.7 1.3 -2.6 -1.7 -1,7 -2.2 2.6 3 3.9 5.7 4.2 4.7 4.7 7.1 7.4 6.5 6.4 3.1 2.7 0.8 23 2.9 2.6 3.4 Data Q1 C O D E F 194304 194401 1944Q2 5194403 7194404 8 194501 9194502 30 194503 31 194504 32 194601 33 194602 34 194603 135 194604 136 194701 137 1947Q2 138 1947Q3 139 194704 140 1948Q1 141 1948Q2 142 194803 143 194804 144 194901 145 194902 146 1949Q3 147 194904 148 195001 149 195002 150 195003 151 195004 152 1951Q1 153 195102 154 195103 155 195104 156 1952Q1 157 1952Q2 158 1952Q3 159 195204 160 195301 161 195302 26 34 11 -0.3 -14 -0.3 0.3 1.1 14 14 1.5 4 77924NGAN AT 5.4 5.8 8.6 8.7 12.7 16.4 15.5 14.7 10.7 6.8 1.4 0.8 1.7 3 5.1 8.4 11.4 11.7 10.6 8.1 3.1 0.7 -1.2 -21 -1.6 Data Q1 jrubials 63 195304 164 195401 165 195402 166 195403 167 195404 168 195501 169 195502 170 1955Q3 171 195504 172 195601 173 195602 174 1956Q3 175 195604 176 1957Q1 177 195702 178 195703 179 195704 180 195801 181 195802 182 195803 183 195804 184 195901 185 1959Q2 186 1959Q3 187 195904 188 196001 189 1960Q2 190 196003 191 1960Q4 192 1961Q1 193 196102 194 1961Q3 195 1961Q4 196 1962Q1 197 196202 198 1962Q3 199 1962Q4 200 196301 OOOC 525C 102 T HARD THIM -0.5 0.2 0.5 0.9 1 0.3 0.2 0.5 -0.3 0.2 OO OOOONN3 NO 0.2 0.5 2.1 2.6 3.3 4 3.3 2.7 2.9 2.5 1.8 2.2 1.6 0.7 1.3 1.3 1.3 2 0.8 1.3 15 13 13 0 0 08 15 19 19 Data Q1 2.3 + 196302 196303 196304 196401 196402 1964Q3 7196404 8 196501 9196502 0 196503 1196504 2 196601 13/196602 14 196603 15 196604 16 196701 17 196702 18 196703 219 196704 220 196801 221 1968Q2 222 196803 223 196804 224 196901 225 1969Q2 226 1969Q3 227 196904 228 197001 229 1970Q2 230 197003 231 197004 232 1971Q1 233 1971Q2 234 197103 235 197104 236 197201 237 197202 238 197203 239 197204 Th 190938063348881513414334 1.7 2.5 1.7 2.3 24 2.8 3.7 3.8 5.4 4.7 4.4 5 3.4 3 2 13 21 31 42 5 47 51 52 Data Q1 E F G 197301 197302 197303 197304 197401 5197402 5197403 7197404 8 1975Q1 9 197502 0 197503 51 197504 52 197601 53 197602 54 197603 55 197604 56 1977Q1 57 197702 58 197703 259 197704 260 197801 261 1978Q2 262 197803 263 197804 264 197901 265 1979Q2 266 1979Q3 267 197904 268 198001 269 198002 270 198003 271 198004 272 198101 273 198102 274 198103 275 198104 276 198201 277 198202 278 198203 5.7 7.1 7.9 9.1 9.7 11.1 11 12.1 11.6 10.5 10.8 9.9 9.5 8.4 6.6 5.9 6.6 7.8 8.4 9.1 9 8.8 9.2 8.8 9 94 88 94 9.5 9.5 10.5 11 12.3 12.5 127 123 114 116 106 Data Q1 + F G 279 198204 280 198301 281 198302 282 198303 283 198304 284 198401 285 198402 286 198403 287 198404 288 1985Q1 289 198502 290 198503 291 198504 292 198601 293 198602 294 1986Q3 295 198604 296 1987Q1 297 1987Q2 298 198703 299 1987Q4 300 198801 301 198802 302 198803 303 198804 304 1989Q1 305 1989Q2 306 1989Q3 307 1989Q4 308 199001 309 199002 310 199003 311 199004 312 199101 313 199102 314 199103 315 199104 316 199201 317 199303 6619 TL 007 CALLMONTT652 9.6 7.7 - 5.9 5.3 4.7 5.1 4.6 3.8 3.7 3.6 4 4.1 4.1 4.3 3.9 4.2 44 4 4.6 45 4.2 4.1 4 4 4.1 4.5 4.9 5.3 52 54 46 41 5 64 62 58 41 16 + 318 199203 319 199204 320 199301 321 199302 322 199303 323 199304 324 199401 325 199402 326 199403 327 199404 328 199501 329 1995Q2 330 1995Q3 331 199504 332 199601 333 199602 334 1996Q3 335 199604 336 1997Q1 337 1997Q2 338 1997Q3 339 199704 340 1998Q1 341 199802 342 1998Q3 343 1998Q4 344 199901 345 1999Q2 346 1999Q3 347 199904 348 200001 349 200002 350 200003 351 200004 352 200101 353 200102 354 200103 355 200104 356 200201 acminns B 12 1.8 21 18 1.7 1.8 0.5 0 0.2 0 1.5 2.7 2.3 122 2 15 1.4 1.4 2 2.1 1.6 1.7 1 1 N 1 0.8 1.1 OP 186 0.8 1.6 2.2 2.4 26 2.4 2.7 3.1 2.8 3.6 2.7 1.1 1.6 + D M A4 357 200202 358 200203 359 200204 360 200301 361 200302 362 200303 363 200304 364 200401 365 200402 366 200403 367 200404 368 200501 369 200502 370 200503 371 200504 372 200601 373 200602 374 200603 375 200604 376 200701 377 200702 378 200703 379 200704 380 200801 381 200802 382 200803 383 200804 384 200901 385 200902 386 2009Q3 387 200904 388 201001 389 201002 390 201003 201004 392 201101 393 201102 394 201103 395 201104 B 14 23 3.8 4.5 2.8 21 1.7 0.9 2.2 2 2.3 2.1 1.9 2.6 2.2 2.4 2.6 1.7 1.4 1.8 2.2 2.1 2.4 1.8 2.4 3.4 1.9 1.2 0.1 -0.9 0.8 1.6 1.4 1.8 2.3 2.6 3.4 3 27 Data Q1 F D E ( 396 201201 397 201202 398 201203 399 201204 400 201301 401 201302 402 201303 403 201304 404 201401 405 201402 406 201403 407 201404 408 201501 409 201502 410 201503 411 201504 412 201601 413 201602 414 201603 415 201604 416 201701 417 2017Q2 418 201703 419 201704 420 201801 421 201802 422 201803 423 201804 424 201901 425 201902 426 2019Q3 427 201904 428 202001 429 202002 430 202003 431 202004 432 202101 433 202102 434 202103 insane 23 16 12 0.9 0.9 0.8 11 0.9 14 22 21 1.9 11 0.9 1.2 1.3 1.5 1.5 1.2 524 1.4 1.9 1.3 1.4 1.8 2.1 2.3 2.7 2 16 2.2 1.9 2.1 1.8 0 0.3 0.8 14 34 4.1 Data Q1 + E 2 A4 411 201504 412 201601 413 201602 414 201603 415 201604 416 201701 417 2017Q2 418 201703 419 201704 420 201801 421 201802 422 2018Q3 423 201804 424 2019Q1 425 201902 426 2019Q3 427 201904 428 202001 429 202002 430 202003 431 202004 432 202101 202102 434 202103 435 202104 436 2022Q1 437 438 439 440 X fx B 1.3 3552 1.5 15 1.2 14 19 TALLINN N 34 L3INOND 0 0 3 A4LT 1.3 1.4 1.8 21 2.3 2.7 2 1.6 2.2 19 2.1 1.8 0.3 0.8 1.4 34 WI 4.1 4.7 5.8 C BIU - - - A + E L
