Which periods did they do a poor job

Reference no: EM131022237

[Comparing actual inflation and expected inflation] Go to the Web site of the Federal Reserve Bank of St. Louis (FRED) (research.stlouisfed.org/fred2/ categories/22) and download monthly data on the inflation rate expected by consumers as measured by the University of Michigan's survey (MICH) for 1978 to the present. Next, download the monthly inflation rate measured using the consumer price index, or CPI (CPIAUCSL), for the same period. (You can find the inflation rate by clicking on Units and selecting Percentage Change from Year Ago.) Plot both series on the same graph. During which periods did consumers do a good job of forecasting the inflation rate? During which periods did they do a poor job? Do consumers' expectations of the inflation rate tend to be more volatile or less volatile than the actual inflation rate?

Reference no: EM131022237

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