Additional information are given below :

. The Federal Reserve Bank of St. Louis maintains a database that contains the data needed for this question. Go to httpszi'ffredstlouisfedorg' and download the data., Find four quarterly time series: (i) Real Potential Gross Domestic Product (GDPPOT); (ii) Real Gross Domestic Product (GDPCl); (iii) Effective Fed Funds Rate (BOGZIFLD72052006Q); and (iv) Ination Rate, Personal Consumption Expenditures, Excluding Food and Energy (BPCCROIQISGNBEA). (a) For the sample period 1981:1-2015:4, construct an output gap series. Dene output gap as (Real GDP Potential Real GDPNPotential Real GDP, expressed in percentage. (b) For the sample period 1981:1-2015z4, run a regression of Fed lnds rate on a constant, output gap and ination rate. The data frequency is quarterly, but make sure that all the variables are expressed in annual rate and percentage. (c) Interpret the Fed's monetary policy based on your estimates in (b)