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Table 1-2 gives data on the Consumer Price Index (CPI), S&P 500 stock index, and three-month Treasury bill rate for the United States for the years 1980-2007.
a. Plot these data with time on the horizontal axis and the three variables on the vertical axis. If you prefer, you may use a separate figure for each variable.
b. What relationships do you expect to find between the CPI and the S&P index and between the CPI and the three-month Treasury bill rate? Why?
c. For each variable, “eyeball” a regression line from the scatter gram.
CONSUMER PRICE INDEX (CPI, 1982-1984 = 100), STANDARD AND POOR’S COMPOSITE INDEX (S&P 500,1941-1943 = 100), AND THREE-MONTH TREASURY BILL RATE (3-mT BILL, %)