The Annual Inflation Rate Essay Research Paper — страница 2

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place? The fourth and final variable I chose to help explain inflation was new home sales. Construction spending is a good indicator of our nation?s economy, but the actual purchase of new homes is probably a better indicator of consumer spending. If the houses are built and no one is buying, it does not help the economy. ?Volume of sales is a good indicator of the state housing demand? (New Home, p. 1). I chose this variable to represent consumer spending and demand coupled with construction spending; both of these are excellent economic indicators. The hypothesis for this variable is as new home sales increase, the inflation rate will also increase due to high demand and increased spending. The strength of the variables I have chosen is that all of the leading economic

indicators are covered in these few variables: employment, interest rates, income, construction spending, and consumer spending. These variables together should help to broaden the understanding of what causes inflation. (Not really). I do, however, feel that I have gained some much-needed experience in choosing variables that may contribute to substantially to a given problem. Y(i) = Annual inflation rate (CPI base year 1982?1984 = 100) X(1) = Unemployment rate X(2) = Federal funds interest rate X(3) = Per capita income (in current and 1998 CPI-U adjusted dollars) X(4) = New Home Sales in 1000?s. YearY(i)X(1)X(2)X(3)X(4) 19765.87.75.0414464646 19776.57.15.0914920819 19787.66.17.9315588817 197911.35.811.1915789709 198013.57.113.2715423545 198110.37.616.3815334436

19826.29.712.2615311412 19833.29.69.8815537623 19844.37.510.2316203639 19853.67.28.116683688 19861.97.06.8117356750 19873.66.26.6617779671 19884.15.57.5718082676 19894.85.39.2218477650 19905.45.68.1017942534 19914.26.85.6917493509 19923.07.53.8517249610 19933.06.93.0217797666 19942.66.14.218208670 19952.85.65.8418425667 19962.95.45.3018841757 19972.34.95.4619541804 19981.64.55.3520120886 Cited Bureau of Labor Statistics. ?Consumer Price Index?. ?Fedpoint 15: Federal Funds?. Lonski, John. ?Inflation is Back?. ?New Home Sales?.