Use quarterly, end-of-period Federal Reserve Economic Data (FRED) between January 2007 and December 2020 to produce one
Question:
Use quarterly, end-of-period Federal Reserve Economic Data (FRED) between January 2007 and December 2020 to produce one graph (Figure 1) showing growth rates in real GDP and the cyclical rate of unemployment in the U.S. economy. Measure the unemployment rate on the secondary axis. Copy your Excel-generated graph into your answer file and proceed with part (b) below.
Adjacent to the graph you produced in (a) above. Explain how long it took cyclical unemployment to fall back to pre-recession rates. Also, with assistance from ChatGPT, discuss in no more than 100 words two causes for the recovery of labor markets in the US to have extended beyond 2009.
Now, generate a graph (Figure 2) of the natural unemployment rates during January 2007 and December 2020 directly from FRED and copy it underneath your answer to (b) above. Underneath and in no more than 100 words, assisted by ChatGPT, what explains the observed trend in the natural rate of unemployment during that period?
International Finance Theory and Policy
ISBN: 978-0133423648
10th edition
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz