Question 2. The Federal Reserve Bank of St. Louis offers a wide range of economic data at its Web site, called FRED (fred.stlouisfed.org/) including data for Japan. We can use these data to compare the behavior of real GDP per capita and inflation in Japan and Canada.

a. Download annual data on real GDP per capita in Japan (JPNRGDPC) and for Canada (CANRGDPC) from 1960 to 2011. Chart the two data series on the same graph. How does real GDP per capita in Japan compare to real GDP per capita in Canada? Have there been any changes in the relationship over time? Briefly explain.

b. Download annual data on the consumer price index for Japan (JPNCPIALLAINMEI) and Canada (CPALCY01CAA661N) from 1961 to 2019. For both Japan and Canada calculate the inflation rate as the annual growth rate of the consumer price index. Chart the two data series on the same graph. How does the inflation rate in Japan compare to the inflation rate in the Canada? In particular, how do the inflation rates in the two countries compare since 1990? Has either country ever experienced negative inflation rates?