Question
Go to https://fred.stlouisfed.org/ and retrieve data ranging from 2011/7/1 to 2017/7/1 for interest rates and prices. To get the interest rate data, click on Category
Go to https://fred.stlouisfed.org/ and retrieve data ranging from 2011/7/1 to 2017/7/1 for interest rates and prices. To get the interest rate data, click on Category under the search box, click on Interest Rates under Money, Banking, & Finance, click on Treasury Bills and then select 3-Month Treasury Bill: Secondary Market Rate with monthly frequency. To get the price data, click on Category under the search box, click on Producer Price Indexes (PPI) under Prices and then select Producer Price Index for All Commodities with monthly frequency. Place the data in two columns of an Excel spreadsheet. Derive the change in interest rates on a monthly basis. Then derive the percentage change in the producer price index on a monthly basis, which serves as a measure of inflation. Apply regression analysis in which the change in interest rates is the dependent variable and inflation is the independent variable. Explain the relationship that you find.
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