Select any combination of variables by clicking on the check-boxes or the variable name. Note: You may choose a maximum of two variables.
Click on the Plot Data to plot the graph.
Toggle the Show Recessions button to highlight recession years.
Toggle the Series Statistics button to display simple descriptive statistics on each selected variable.
Click on the Yield Curve button to display the Yield Curve for a particular quarter. By using your mouse-cursor to drag on the slider button below the years on the horizontal axis of the data plot, you will be able to select any date between 1960:1 and 2004:2.
Click on the Scatter Plot button to toggle on or off a scatter plot of the two chosen series. Please note: you must select two variables to use this feature. The green cross-lines pin-point the current quarter selected by the slider described in 5). A sample correlation measure is displayed in this scatter plot window.
Press Reset to start over.
Questions:
Select the nominal federal funds rate and real federal funds rate series and plot them together on a graph. What do you observe about the relationship between these two variables over time? What does it imply about the ability of the Federal Reserve to influence the course of the economy?
Select the nominal federal funds rate and 10-year Treasury note rate series and plot them together on a graph. What do you observe about the relationship between these two variables over time?
Click on the scatter plot button to see a scatter plot of these two variables. What does this plot tell you about the relationship between the two interest-rate series?
Plot the three-month Treasury bill rate and click on the show recessions button. What do you observe about the interest rate just prior to the beginning of a recession? What does the pattern imply about the Fed's ability to cause recessions?
Select the GDP growth series and add it to the plot. What relationship do you observe between the interest rate and GDP growth rate series? (You may wish to toggle off the show recessions button to see the series more clearly.)
