Answer Happy

Go to the St. Louis Federal Reserve FRED database and find data
on house prices (SPCS20RSA), stock prices (SP500), a measure of the
net wealth of households (TNWBSHNO), and personal consumption
expenditures (PCEC). For all four measures, be sure to convert the
frequency setting to “Quarterly.” Download the data into a
spreadsheet and make sure the data align correctly with the
appropriate dates. For all four series, for each quarter, calculate
the annualized growth rate from quarter to quarter. To do this,
take the current-period data minus the previous-quarter data and
then divide by the previous quarter data. Multiply by 100 to change
each result to a percent and multiply by 4 to annualize the
data.
a. For the four series, calculate the average growth rates over
the most recent four quarters of data available. Comment on the
relationships among house prices, stock prices, net wealth of
households, and consumption as they relate to your results.
b. Repeat part (a) for the four quarters of 2005, and again for
the period from 2008:Q3 to 2009:Q2. Comment on the relationships
among house prices, stock prices, net wealth of households, and
consumption as they relate to your results, before and during the
crisis.
c. How do the current household data compare to the data from
the period prior to the financial crisis, and during the crisis? Do
you think the current data are indicative of a bubble?