What proportion of the variance in unemployment is explained by inflation? The relationship between inflation and unemployment is not very strong. However, if we are interested in predicting unemployment, we would probably want to predict next year's unemployment from this year's inflation. We can construct an equation to do this by matching each yrear's inflation with the next year's unemployment, as shown in the following table.

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0700 0 5.1 .6 6 8 3 6 9 『44 5 6 5.5 4 4 5 9 9.8 8 e 7 4 6 4934 5.117 50 2 3 1 2 1 3324 0 2 1 3 0 12222 2 2 2 2 2 2 2 2 .025 36 8 5 9 1 6 4 9 5 55 4 81 4 4 6 1 1 977 5:376 la 3 1 4 4 4 6 32 22 23 1 1 1.23