Reddaway 4 Money supply causing

Rank the data, so you are not affected buy the outliers.

1.   Correlation between GDP growth and Ms doesnt exist, mainly because of germany.

2.   Prices and Ms have high correlation

3.   BOP correlation is small, but nonexisent for previous period sum of BOP/sum of gdp a current prices. bop is influenced by the capital movements and other things.

4.   Exchange rate and Ms have high correlation

5.   Some correlation with unemployment (calculate by substracting 77 from 89)

You have to be careful:

1.   Only small number of countries

2.   Causal problems (we dont know which causes which

People are uninterested in correlation when they show no correlation