Description

Rosanne Yang
Assignment 1:

The average inflation rate from 1960Q1 to 1982Q4 is 4.92%, and the average inflation rate from 1983Q1 to 2021Q2 is 2.25%. While there are many factors that could have influenced this, one of the most important factors is a change in monetary policy. To combat inflation, Paul Volker hiked interest rates up to an extremely high level. While this effectively manufactured a recession, as it made it very costly to borrow money, it did result in a dramatic lowering of inflation expectations in the last few decades, and we have had consistently low inflation ever since. This is still an open and controversial question, however, and not everyone agrees that the actions of the federal reserve were the cause of the fall in inflation.
Elizabeth Goodwin

𝑅𝑒𝑎𝑙 𝐺𝐷𝑃 = 𝐺𝐷𝑃𝑁𝑜𝑚𝑖𝑛𝑎𝑙 𝐷𝑒𝑓𝑙𝑎𝑡𝑜𝑟 𝐺𝐷𝑃 • 100

Elizabeth Goodwin
Rosanne Yang

Elizabeth Goodwin
Rosanne Yang