Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download

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Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download the data for the 1-year Treasury bill (TB1YR) for the period from 1980 to the most recent month. Find the consumer price index for all urban consumers (CPIAUCSL) and then click on the link “Edit graph.” In the pull-down menu for units, choose “Percentage change from year ago.” Download the data. Subtract your measure of inflation from the values for the 1-year Treasury bill and graph both the resulting real interest rate and the values for the nominal Treasury bill interest rate. During which periods is the gap between the nominal interest rate and the real interest rate the greatest?

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Money, Banking, and the Financial System

ISBN: 978-0134524061

3rd edition

Authors: R. Glenn Hubbard, Anthony Patrick O'Brien

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