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Write an empirical paper using recent macroeconomic data. For example, based on the data, you may test the validity of a negative relationship between variables X and Y (e.g., unemployment and inflation rates, as suggested by the Phillips curve). The time-series information for X and Y may be available from public sources, such as the World Bank’s World Development Indicator, the IMF’s International Financial Statistics, the Bank for International Settlements, OECD, or St. Louis Fed’s FRED. You should draw a graph using Excel or perform a regression analysis using Excel Data Analysis Tools (document attatched) or statistical software. And then, try to link your empirical observation with the theory we learned from class and evaluate your finding. Explain what may lead to such a result if you find any gap between theoretical prediction and empirical evidence.

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2. Your analysis (double-spaced, four pages maximum) must include at least the following:

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i) One paragraph summarizing your hypothesis and theoretical prediction from the model

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ii) One paragraph about empirical findings (e.g., what you find from your graph or regression analysis). You must also include information about the data sources (i.e., where you obtain the data).

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iii) One paragraph for the interpretation. For this, try to answer the following questions: Does a macroeconomic theory from class well represent the actual world? If there is a discrepancy, can you provide any explanations?

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