Go to the St. Louis Federal Reserve FRED database, and find data on real GDP (GDPC1) and the GDP deflator price index (GDPDEF). Using the units setting, choose “Percent Change from Year Ago” to convert each measure into real GDP growth and the inflation rate, respectively. Download both series onto a spreadsheet.

a) For each measure of real GDP growth and the inflation rate, calculate the average and the standard deviation over the following periods: 1970–1982 (the Great Inflation), 1983–2007 (the Great Moderation), and 2008 to the most recent data available. In Excel, these values are easily computed by using the “=average()” and “=stdev()” cell commands.

b) Which period had the highest and lowest average real GDP growth rates? Which had the most volatile swings in real GDP growth?

c) Which period had the highest and lowest average inflation rates? Which had the most volatile swings in the inflation rate?