| 1 yr | inf | D | DX | |
| 6% | 3% | 1 | 0.026549 | |
| 4% | 2% | 1 | 0.021084 | |
| 6% | 4% | 1 | 0.036852 | |
| 5% | 3% | 1 | 0.029582 | |
| 5% | 3% | 1 | 0.032537 | |
| 5% | 3% | 1 | 0.027986 | |
| 5% | 3% | 1 | 0.02591 | |
| 4% | 2% | 1 | 0.023656 | |
| 3% | 3% | 1 | 0.030281 | |
| 5% | 3% | 1 | 0.031226 | |
| 5% | 6% | 1 | 0.058018 | |
| 4% | 2% | 1 | 0.018048 | |
| 4% | 2% | 1 | 0.015833 | |
| 6% | 0% | 1 | -0.00249 | |
| 7% | 2% | 1 | 0.01519 | |
| 8% | 5% | 1 | 0.050532 | |
| 5% | 3% | 1 | 0.025455 | |
| 1993 | 6% | 2% | 1 | 0.019462 |
| 7% | 0% | 0 | 0 | |
| 11% | 2% | 0 | 0 | |
| 16% | 7% | 0 | 0 | |
| 13% | 8% | 0 | 0 | |
| 11% | 8% | 0 | 0 | |
| 14% | 7% | 0 | 0 | |
| 14% | 10% | 0 | 0 | |
| 12% | 8% | 0 | 0 | |
| 11% | 3% | 0 | 0 | |
| 12% | 9% | 0 | 0 |
Regfession equation: y=1.02x+0.0367
Assumptions: Classic Normal Linear Regression Model
Null hypothesis: The population slope coefficient is zero
Alternate hypothesis: The population slope coefficient is not zero
Test statistic: 5.611895
P value: 6.74E-06
Interpretation: The t-value is statistically significant. There is overwhelming statistical evidence that a relationship exist(positive or negative) between inflation and the ensuing one year term deposit rate.
Coefficient of det: 54.778%
Structural change in the model
Assumptions: Classic Normal Linear Regression Model.
Null hypothesis: The population “Dummy x Inflation” coefficient is zero.
Alternate hypothesis: The population “Dummy x Inflation” coefficient is not zero.
Test statistic: -1.01758
P value: 0.319027
Interpretation: The coefficient is statistically insignificant. This inability to reject the null hypothesis renders us unable to conclude that there has been a structural change in the slope coefficient since the inflation target began in 1993. This seems strange since one would think that the pro-cyclical movement of the cash rate would force interest rates to be even closer related to inflation. In fact, the relationship loosened. The adjusted coefficient of determination was 46.9% before the inflation target and -0.85% (0) after.
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