The Table Below Shows the Percentage Difference Between Real and Potential

Essay

The table below shows the percentage difference between real and potential GDP and the rate of inflation for the years 1999 through 2003. If there were a presidential election in the year 2000, would these data support the view that there was a political business cycle during this period? $$\begin{array} { | c | c | c | } \hline \text { Year } & \begin{array} { c } \text { Percentage Difference } \\\text { Between Real and } \\\text { Potential GDP }\end{array} & \begin{array} { c } \text { Rate of } \\\text { Inflation }\end{array} \\\hline 1999 & - 1.00 & 5.47 \\\hline 2000 & 1.01 & 4.54 \\\hline 2001 & 3.23 & 6.05 \\\hline 2002 & - 0.27 & 8.42 \\\hline 2003 & - 3.76 & 9.20 \\\hline\end{array}$$