1) Describe how the unemployment rate and the inflation rate have changed over the period in the three countries. Use a line graph of both time series to help explain your observations.
(30% maximum of the mark) Note, for Germany and the RoI you need to look up AMECO on that web address and then under “Consumption” go to Consumer Price Index/and then Harmonized (you will need to “widen” the selection of years, you will need to calculate annual inflation rates from the Index#). Similarly, under “Population and Employment”, go to Unemployment and then Percentage of the Active Population Unemployment Rate: Total.
# You want to work out the inflation rate for 2018- take the price index number for 2018 (say, 105) and subtract the price index number for 2017 (say, 101) and then divide by the 2017 price index number and then multiply by 100, i.e. (105-101)/101*100= 4%.
2) For each country, use scatterplots to describe the relationship between
i) The inflation rate and the unemployment rate
ii) The change in the inflation rate and the unemployment rate. (20%)
3) Use economic theory to explain any relationship observed in your data. (50%)
