Summary Statistics : Data And Methods

The interest rates are expected to reach 7.0% by June, the most severally effected by these constant raises are shareholders. Because of these immediate effects market economists are largely against the interest rate hikes. Their position is that the average inflation rate over the past three years has been at around 2% close to the markets expected inflation rate of 1.9%. The economy is on a sixteen year run, continually moving forward. The historical data is there however; the consumer price index was at 1.6% over the past twelve months and the March year over year rate was at 3.7%

GDP trends with the economic growth. If the economy is booming and doing well then the GDP will increase (direct correlation). Unemployment is low whenever the GDP is slow. Currently, unemployment is pretty low. Inflation raises the price of goods and decrease the value of money. Inflation is the most important of the 3 to think about when planning financially. Inflation can result in higher mortage rates, rent, monthly payments, etc. Unemployment and GDP can also make an impact on what to financially plan for. If unemployment is high, it is a good idea to save up.

To avoid spurious results, unit root tests using Augmented Dickey-Fuller (ADF) (Dickey and Fuller, 1981) and Philips-Perron (PP) are performed to determine the time-series properties of the variables employed in the analysis. Two or more variables are said to be co-integrated when they exhibit long run equilibrium (relationship) if they share common trend(s).Therefore Auto-regressive distributed lag bounds approach (ARDL) is used to test it. The choice is based on several

1). In 2016, the inflation rate was at 2.07 percent, and as of February 2017 the rate is about .90 percent (“Inflation Rate,” n.d.). As we can see, the economy has bounced back from its position during the recession. GDP has increased drastically since 2009, unemployment has decreased past its position from 2007, the interest rate has risen, and inflation has also gone up which indicates a strong and healthy economy. Although a higher interest rate is unfavorable for consumers and businesses, it means that the government is confident that the economy will continue to improve. This also means that consumers have enough disposable income to spend on whatever they wish, so the government does not need to lower the rate in order to encourage borrowing and spending. These metrics indicate that the economy has recovered from the Great Recession, and is continuing to improve.

Inflation is the sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change. (Investopedia) During periods of inflation, the prices of products and services will rise. There are several reasons why an economy would see a rise in inflation. Decrease in supplies, corporate deciding to charge more, and consumer confidence are some of the reasons why an economy would see the inflation rate increase. Consumer confidence is when consumers gain more confidence in spending due to a low unemployment rate and wages being stable. Decrease in supplies is when consumers are willing to pay more for a product or service is that is slowly becoming unavailable due to a decrease in supplies. Corporate decisions are when the corporations basically decide

A company with factories located in New York and Michigan produce yarn, using two different types of machines; JC980 and VH80. Each factory uses only one machine type. The sample size is at 1 391 factories.

Real gross domestic product (GDP) is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year (Investopedia.com, 2004). Inflation is the fluctuation of the costs for goods/services and this has a negative impact of increasing unemployment; individuals who are searching for work and are unable to find employment (“Introduction to economics,” 2012).

Also, this estimation allows the using of a lagged dependent variable to check whether there is a possible cointegration in the economic variables, with the possibility of one variable forecasting another (Campbell & Shiller, 1988). Including the lagged dependent variable can reduce the occurrence of autocorrelation arising

Additionally, I will also be testing for granger causality. In order to test for granger causality though we need to use variables which are stationary.

Unemployment Rate: most of the companies can not afford to suffer from fixed cost like employees’ salary, this is caused by the truth that full-time workers are forced to become part-time,

The unemployment rate in the United States has improved dramatically over the last two years, from a high of 8.3% in July 2012, to a low of 6.6% in January 2014. In October of 2012, the civilian labor force increased from 578,000 to 155.6 million, labor force participation increased up to 63.8%, and total employment overall rose by 410,000! Since then, the unemployment rate has been falling at a stable rate due to a political push from Washington DC and new employment initiatives. The inflation rate over the last 2 years has been relatively stably, with a few major increases and decreases in 2012 and 2013. It reached a high of 2.3% in June of 2012, and reached a low of 1.0% at the end of 2013. The federal interest rate has remained at a constant .25% over the past few years.

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.

There has been a long standing controversy among the economist about the validity of PPP (Purchasing Power Parity) in the long run. The parity reveals that prices in two different economies should be identical to each other when they expressed in terms of the same currency. It is a central building block in the monetary models of exchange rate determination. One of the most common practices, to test the validity of PPP is through unit root test of real exchange rate. In this paper unit root test has been done based on the data on Bangladesh and its major trading partner India, to see whether exchange rate has unit root or not. It has been found out that the PPP holds i.e. real exchange is not trend stationary in the

Discuss the role of government policy in reducing unemployment and inflation. In your discussion make use of the diagrammatic representation of the macroeconomy developed in lectures in Term 2

Malaysia’s Unemployment Rate since 2000 till present. Notice the peaks after an expansion and troughs after a recession. This graph also indicates the business cycle in Malaysia.