Thursday, September 26, 2019

Selecting a macroeconomic variable for a country and explaining its Essay

Selecting a macroeconomic variable for a country and explaining its determination using macroeconomics analysis - Essay Example The inflation rates of the country shall be studied over a period of 25 years ending in 2011 inclusive. The selection of the inflation rate of Canada comes in at a very ripe time and with so much significance and importance as global economic experts continue to blame inflation as a major dictate of the world economic climate (Botric and Cota, 2006.). It is therefore anticipated that this study would eventually end up as a guide for economic policy makers within the country to ascertain various ways in which inflation has affected Canada’s economy in times past and how it affects it today so that based on these, they can make prudent economic decisions for Canada in the future, using inflation rates. Dependent variable Inflation is a determining component for the relationship that exists between value and price (Grigorian et al, 2008). Generally, an economy that is growing so fast would see a situation whereby prices of goods are pushed to a protracted time ahead of the prevai ling utility value of goods and services. The rate of which such pushes take place may be defined as inflation (Fischer et al, 1998). Because inflation is likely to distort prices and undermine the market exchange by it creates an unclear relationship between value and price, economists have usually tagged raw inflation as a bad phenomenon. Countries with relatively lower inflations are thus said to be doing economically well than those with higher inflation rates. It is in light of this that most countries have worked towards achieving low inflation rates as against higher inflation rates. The case of Canada’s inflation from 1987 to 2011 is presented in the graphs and charts below. Source: Trading Economics (2013) The scattered graph above gives the trends of inflation rates for Canada in a 25 year period from 1986 to 2011. A tabulated analysis presenting the specific inflation rates on a monthly basis from 1990 to 2006 is also presented below for vivid depiction of the spec ific numbers. Year jan feb mar apr may jun jul aug sep oct nov dec ann 2011 2.3% 2.2% 3.3% 3.3% 3.7% 3.1% 2.7% 3.1% 3.2% 2.9% 2.9% 2.3% 2.9% 2010 1.9% 1.6% 1.4% 1.8% 1.4% 1% 1.8% 1.7% 1.9% 2.4% 2% 2.4% 1.8% 2009 1.1% 1.4% 1.2% 0.4% 0.1% -0.3% -0.9% -0.8% -0.9% 0.1% 1% 1.3% 0.3% 2008 2.2% 1.8% 1.4% 1.7% 2.2% 3.1% 3.4% 3.5% 3.4% 2.6% 2% 1.2% 2.4% 2007 1.1% 2% 2.3% 2.2% 2.2% 2.2% 2.2% 1.7% 2.5% 2.4% 2.5% 2.4% 2.1% 2006 2.8% 2.2% 2.2% 2.4% 2.8% 2.4% 2.3% 2.1% 0.7% 1% 1.4% 1.7% 2% 2005 1.9% 2.1% 2.3% 2.4% 1.6% 1.7% 2% 2.6% 3.2% 2.6% 2% 2.1% 2.2% 2004 1.3% 0.7% 0.8% 1.7% 2.4% 2.5% 2.3% 1.8% 1.8% 2.3% 2.4% 2.1% 1.9% 2003 4.5% 4.7% 4.2% 2.9% 2.8% 2.6% 2.1% 2% 2.2% 1.6% 1.6% 2.1% 2.8% 2002 1.3% 1.4% 1.9% 1.7% 1.1% 1.2% 2.1% 2.5% 2.3% 3.2% 4.4% 3.8% 2.3% 2001 3% 2.9% 2.4% 3.5% 3.9% 3.4% 2.7% 2.8% 2.6% 1.9% 0.6% 0.7% 2.5% 2000 2.2% 2.7% 3% 2.2% 2.4% 2.8% 2.9% 2.6% 2.7% 2.8% 3.2% 3.2% 2.7% 1999 0.7% 0.7% 1% 1.6% 1.5% 1.6% 1.9% 2.1% 2.6% 2.3% 2.2% 2.6% 1.7% 1998 1.1% 1% 1% 0.9% 1.1% 1% 1% 0.9% 0 .7% 1.1% 1.2% 1% 1% 1997 2.2% 2.3% 1.9% 1.7% 1.5% 1.7% 1.7% 1.8% 1.7% 1.5% 0.9% 0.8% 1.6% 1996 1.6% 1.3% 1.5% 1.4% 1.5% 1.5% 1.3% 1.5% 1.5% 1.8% 1.9% 2.2% 1.6% 1995 0.6% 1.9% 2.1% 2.5% 2.9% 2.7% 2.6% 2.2% 2.2% 2.3% 2.1% 1.7% 2.1% 1994 1.3% 0.1% 0.2% 0.2% -0.2% 0% 0.1% 0.1% 0.2% -0.2% -0.1% 0.2% 0.2% 1993 2% 2.4% 1.9% 1.8% 1.9% 1.7% 1.7% 1.8% 1.8% 1.9% 1.9% 1.7% 1.9% 1992 1.6% 1.6% 1.6% 1.7% 1.3% 1.1% 1.2% 1.1% 1.3% 1.6%

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