Scatter plot diagram between unemployment and inflation rate

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Go to the Federal Reserve Economic Data website and download the monthly data for unemployment rate and inflation rate in the U.S. Make sure that your data spans more than 50 years. (Hint: inflation rate = percentage change in CPI from a year ago).

1. Draw a scatter plot diagram between unemployment and inflation rate (using Excel or any other software)

2. Calculate the coefficient of correlation (using Excel or any other software) between unemployment and inflation rate from January 2018 to December 2020. Is there a correlation in the short-run? Does Phillips curve exist in the short-run?

3. Calculate the coefficient of correlation for the whole sample. Is there a correlation in the long-run? Does the Phillips curve exist in the long-run?

Reference no: EM133465757

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