Regression Analysis of USA Inflation

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This Demonstration shows an interactive application of regression analysis by selecting variables from the checkboxes. Regression analysis deals with the relationship of two or more variables in the appropriate mathematical model. In this case, we model USA inflation (the dependent variable) with some selected independent variables. The Demonstration also finds the optimal selection of variables, where the optimization criterion maximizes (the adjusted coefficient of determination).

Contributed by: Matus Baniar (September 2012)
Open content licensed under CC BY-NC-SA


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The existence of a high value between the independent variables and the dependent variable (inflation rate) in this linear model does not establish that those independent variables cause changes in the dependent variable; it establishes only the correlation created by the linear model specification.

References

[1] J. AndÄ›l, Základy matematické statistiky, Karlin, Czech Republic: MatfyzPress, 2007.

[2] T. Cipra, Finanční ekonometrie, Praha, Czech Republic: Ekopress, 2008.

[3] The World Bank. "Financial Sector." (Aug 22, 2012) data.worldbank.org/topic/financial-sector.



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