Misery Index = inflation + unemployment rate. Calculate Misery Indices for the U.S., Brazil, and South Africa. Use the misery indices as alternatives to forecast the following exchange rates one year into the future: Formula: RPPP, replace inflation rate with the respective misery index. a. Brazil real/US dollar. b. South African rant/US dollar South African rant/Brazil real c. Relative PPP: S2 = Si ((1+*)/(1+1)] *= foreign inflation rate, * = domestic inflation rate 2021* 3.6 7.3 1.7 7.2 4 7.1 4.6 Industrial production, % change on a year ago latest -7.3 Sep +6.9 Sep -13.8 Aug -6.3 Aug -7.8Jul -6.2 Aug -10.0 Aug -0.3 Aug -5.0 Sep +16.0 Aug -2.1Q2 -8.0Aug +2.0 Feb -3.0 Aug -4.6 Aug -2.6 Aug -9.0 Aug Country United States China Japan Britain Canada France Germany Italy Russia Turkey Australia India Indonesia South Korea Argentina Brazil Mexico Saudi Arabia South Africa Gross domestic product, % change on a year ago latest quarter* 2020* -9.0Q2 -31.4 -4.6 +4.9Q3 11.2 1.9 -9.902 -28.1 -6.4 -21.5Q2 -58.7 -10.6 -13.0Q2 -38.7 -5.8 -18.9Q2 -44.8 -10.2 -11.302 -33.5 -5.8 -18.0Q2 -42.8 -10.4 -8.0Q2 na -5.7 -9.902 na -3.9 -6.3Q2 -25.2 -4.5 -23.902 -69.4 -8.5 -5.302 na -2.2 -2.8Q2 -12 -1.5 -19.102 -50.7 -11 -11.402 -33.5 -5.2 -18.702 -52.7 -9.1 0.32019 na -5.2 -17.102 -51 -8 5.8 Unemployment rate, % latest 7.9 Sep 3.8Q2* 3.0 Aug 4.5Jul* 9.0 Sep 7.5 Aug 4.4Aug 9.7 Aug 6.4Aug* 13.4Jul* 6.9 Sep 6.7 Sep 5.0Q1* 3.6 Sep* 13.102* 13.8Jul* Consumer prices, % change on a year ago latest year ago 2020* +1.4Sep 1.7 1.1 +1.7 Sep 3 2.9 +0.2 Aug 0.2 nil +0.2 Aug 1.7 0.6 +0.1 Aug 1.9 0.7 nil Sep 0.9 0.7 -0.2 Sep 1.2 0.5 -0.6 Sep 0.3 nil +3.7 Sep 4 3.4 +11.7 Sep 9.3 11.7 -0.302 1.6 0.5 +7.3 Sep 4 5.2 +1.4Sep 3.1 1.9 +1.0 Sep -0.4 0.5 +36.6* na 41.7 +3.1 Sep 2.9 2.8 +4.0Sep 3 3.4 +5.7 Sep -1.4 3.4 +3.0 Aug 4.3 3.3 3 3.6 1.6 6.7 4.3 2.9 6 3 3.3 2 na 3.3 Mar 9.0Q2 23.302* 1.5 -9.2 Aug *indicate forecasted/expected values Misery Index = inflation + unemployment rate. Calculate Misery Indices for the U.S., Brazil, and South Africa. Use the misery indices as alternatives to forecast the following exchange rates one year into the future: Formula: RPPP, replace inflation rate with the respective misery index. a. Brazil real/US dollar. b. South African rant/US dollar South African rant/Brazil real c. Relative PPP: S2 = Si ((1+*)/(1+1)] *= foreign inflation rate, * = domestic inflation rate 2021* 3.6 7.3 1.7 7.2 4 7.1 4.6 Industrial production, % change on a year ago latest -7.3 Sep +6.9 Sep -13.8 Aug -6.3 Aug -7.8Jul -6.2 Aug -10.0 Aug -0.3 Aug -5.0 Sep +16.0 Aug -2.1Q2 -8.0Aug +2.0 Feb -3.0 Aug -4.6 Aug -2.6 Aug -9.0 Aug Country United States China Japan Britain Canada France Germany Italy Russia Turkey Australia India Indonesia South Korea Argentina Brazil Mexico Saudi Arabia South Africa Gross domestic product, % change on a year ago latest quarter* 2020* -9.0Q2 -31.4 -4.6 +4.9Q3 11.2 1.9 -9.902 -28.1 -6.4 -21.5Q2 -58.7 -10.6 -13.0Q2 -38.7 -5.8 -18.9Q2 -44.8 -10.2 -11.302 -33.5 -5.8 -18.0Q2 -42.8 -10.4 -8.0Q2 na -5.7 -9.902 na -3.9 -6.3Q2 -25.2 -4.5 -23.902 -69.4 -8.5 -5.302 na -2.2 -2.8Q2 -12 -1.5 -19.102 -50.7 -11 -11.402 -33.5 -5.2 -18.702 -52.7 -9.1 0.32019 na -5.2 -17.102 -51 -8 5.8 Unemployment rate, % latest 7.9 Sep 3.8Q2* 3.0 Aug 4.5Jul* 9.0 Sep 7.5 Aug 4.4Aug 9.7 Aug 6.4Aug* 13.4Jul* 6.9 Sep 6.7 Sep 5.0Q1* 3.6 Sep* 13.102* 13.8Jul* Consumer prices, % change on a year ago latest year ago 2020* +1.4Sep 1.7 1.1 +1.7 Sep 3 2.9 +0.2 Aug 0.2 nil +0.2 Aug 1.7 0.6 +0.1 Aug 1.9 0.7 nil Sep 0.9 0.7 -0.2 Sep 1.2 0.5 -0.6 Sep 0.3 nil +3.7 Sep 4 3.4 +11.7 Sep 9.3 11.7 -0.302 1.6 0.5 +7.3 Sep 4 5.2 +1.4Sep 3.1 1.9 +1.0 Sep -0.4 0.5 +36.6* na 41.7 +3.1 Sep 2.9 2.8 +4.0Sep 3 3.4 +5.7 Sep -1.4 3.4 +3.0 Aug 4.3 3.3 3 3.6 1.6 6.7 4.3 2.9 6 3 3.3 2 na 3.3 Mar 9.0Q2 23.302* 1.5 -9.2 Aug *indicate forecasted/expected values
