# Compute the inflation rate (Inf) as the first difference…

The cs3e1 file contains annual Greek data from 1960 to 1995 on the following variables: PriCon: private consumption at constant market prices of year 1970 (million drachmas); PerDisInc: personal disposable income at constant market prices of year 1970 (million drachmas); CPI: consumer price index (1970 = 1). a) Import this data set to EViews. Compute the inflation rate (Inf) as the first difference of CPI. Plot the levels and first differences of PriCon, PerDisInc and Inf, and briefly comment on the graphs. b) Perform various unit root tests on PriCon, PerDisInc and Inf. What do you conclude?

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Sheet3
Sheet2
Sheet1
Year
PriCon
PerDisInc
CPI
1960.00
107808.00
117179.20
0.78
1961.00
115417.00
127598.90
0.79
1962.00
120050.00
135007.10
0.80
1963.00
126115.00
142128.30
0.83
1964.00
137192.00
159648.70
0.85
1965.00
147707.00
172755.90
0.89
1966.00
157687.00
182365.50
0.92
1967.00
167528.00
195611.00
0.93
1968.00
179025.00
204470.40
0.94
1969.00
190089.00
222637.50
0.97
1970.00
206813.00
246819.00
1.00
1971.00
217212.00
269248.90
1.03
1972.00
232312.00
297266.00
1.07
1973.00
250057.00
335521.70
1.23
1974.00
251650.00
310231.10
1.52
1975.00
266884.00
327521.30
1.70
1976.00
281066.00
350427.40
1.93
1977.00
293928.00
366730.00
2.16
1978.00
310640.00
390188.50
2.44
1979.00
318817.00
406857.20
2.84
1980.00
319341.00
401942.80
3.46
1981.00
325851.00
419669.10
4.08
1982.00
338507.00
421715.60
5.11
1983.00
339425.00
417930.30
6.07
1984.00
345194.00
434695.70
7.13
1985.00
358671.00
456576.20
8.44
1986.00
361026.00
439654.10
10.30
1987.00
365473.00
438453.50
11.92
1988.00
378488.00
476344.70
13.61
1989.00
394942.00
492334.40
15.59
1990.00
403194.00
495939.20
18.60
1991.00
412458.00
513173.00
22.09
1992.00
420028.00
502520.10
25.40
1993.00
420585.00
523066.10
28.88
1994.00
426893.00
520727.50
32.00
1995.00
433723.00
518406.90
34.98

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