Data Exploration

2. Compare long~run market expectations of inflation with a sure of one~year-ahead inflation expectations. Starting with the graph Exploration Problem 1, add as a second line the University of Michigan survey measure of inflation expectations (FRED code: MICH). Why might these mea- sures differ systematically? (Lo4)
3. How does the variability of annual inflation-an indicator of inflation risk- change over time? Graph the percent change from a year ago of the conumet price index (FRED code: CPIAUCSL) since 1990 and visually compare the decades of the 19905. the 20005. and the period that began in 2010. (Lo4)
4. Download the data from the graph that you produced in Data Exploration Prob- lem 3. Calculate the standard deviation of the annual inflation rate for the three time periods and compare these results against your visual assessment from Data Exploration Problem 3. (Lo4)
5. Economists sometimes exclude food and energy prices from the “headline” cort- sumer price index and use the resulting “core” price measure to assess inflation prospects. For the period Since l990. plot on one graph the percent change from a year ago of the consumer price index ( FRIED code: CPIAUCSL) and the per- cent change front a year ago of the consun r price index excluding food and energy (FRED code: CPlLFESL). Visually compare the variability of these two

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