Use all the data in PHILLIPS to answer this question. You should now use 56 years of data.

(i) Reestimate equation (11.19) and report the results in the usual form. Do the intercept and slope estimates change notably when you add the recent years of data?

(ii) Obtain a new estimate of the natural rate of unemployment. Compare this new estimate with that reported in Example 11.5.

(iii) Compute the first order autocorrelation for unem. In your opinion, is the root close to one?

(iv) Use cunem as the explanatory variable instead of unem. Which explanatory variable gives a higher R-squared?