Read the article of No One Believes It but Inflation Is a Pretty Good Bet .pdf

1. According to Mr. Brown “there’s a growing evidence that investors wrong” in their belief that inflation would remain low for years (paragraph 4). What are those evidences in the article? Discuss them.
2. The data fileCPI_and_M2.xlsxprovides CPI (Consumer Price Index) and M2 (in Billions of Dollars) (Money Supply) from 01/01/1980 to 03/01/2016 [fromhttps://alfred.stlouisfed.org/]. Calculate percentage changes in CPI and M2 overtime and plot them against Date. Calculate the correlation between percentage changes in CPI and M2 (You ca calculate correlation coefficient by in Excel or GoogleSpreadsheet by typing in a cell =CORREL(the cells covering the data) ). And attach your plot to your discussion post. Is the correlation coefficient you have calculated consistent with the Quantity Theory of Money? Discuss.

 

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