Question
Need help figuring out how to derive the change in interest rate as well as the percentage change in the producer price index: Using the
Need help figuring out how to derive the change in interest rate as well as the percentage change in the producer price index:
Using the same website, retrieve data at the beginning of the last 20 quarters for interest rates (based on the three-month Treasury-bill rate) and the producer price index for all commodities (under Prices) and place the data in two columns of an Excel spreadsheet. Derive the change in interest rates on a quarterly basis. Then derive the percentage change in the producer price index on a quarterly 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 inde- pendent variable (see Appendix B for information about applying regression analysis). Explain the relationship that you find. Does it appear that inflation and interest rate movements are positively related?
Website from where to find data: http://research.stlouisfed.org/fred2/categories
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