Question
1.Pick one developed economy and one emerging or developing economy. Use the latest version of the IMF World Economic Outlook Database to download inflation data
1.Pick one developed economy and one emerging or developing economy. Use the latest version
of the IMF World Economic Outlook Database to download inflation data for each of the
countries from 1980 to the latest available data. Plot the data in a graph. Answer the following
(a) Describe the evolution of inflation in each country.
(b) Do the countries have independent central banks?
(c) If the country does have an independent central bank, did inflation fall when the central
bank gained independence? Propose some reasons why.
(d) lfthe country does not have an independent central bank, have they managed to find other
mechanisms to establish a low inflation monetary policy regime? Propose some reasons
why.
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