R2 For this question you will need to load the data file inflation data.csv (available from the NYU classes page). The data file contains data on inflation (Tt, stored as inflation), the interest rate (rt, stored as intrate), unemployment rate (m, stored as unemp), and natural rate of unemployment (m², stored as nairu) from 1954Q3 to 2014Q4. You will need to construct the output gap variable yt from the NAIRU and unemploymentrate data as we did in class, with yt =2.3 (m; — т). a) Estimate: \tau_{t}=\beta_{0}+\beta_{1} \pi_{t}+\beta_{2} y_{t}+u_{t} Interpret the estimated coefficients and the R². b) Construct 95% confidence intervals for B1 and B2.

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