In this first part of the capstone project, as I mentioned in the video for one of your options, my objective was for you to get your hands dirty, to get in there and look at data, to become familiar with some of the really good data sources that will help you in the future if you're doing any kind of research or analysis on economic phenomena, and to instead of hearing me talk to you about it, to actually download the data, look at it, graph it, make scatter plots, whatever you want to do or just eyeball it, and look for the normal relationships we've identified for the appropriate and inappropriate policies you've identified, and then think a little bit about the risks. So, you could have chosen Spain in the 2000 to 2008 period, or Spain in the 2009 to 2016 period, and I think this is a fascinating exercise because it's hard to find a country where two different periods are more starkly contrast where the economic situation changed more drastically from one period to the next. So, you have selected to do the 2009 to 2016 period and of course, this is the period first, of the global recession, that was 2009, and then of the eurozone crisis that starts shortly afterward in the countries that belonged to the Euro within the European Union. So, we find in this period, a very dismal economic situation for Spain. First of all, I asked you to think about the gaps that you could diagnose from the data and again, you're using a ready-made indicator, which is a luxury, a ready-made indicator produced by the OECD where they compare how much a country would be capable of producing if all of it's resources were fully used, and how much it actually produces, and we call this difference the output gap, okay? If it's positive, it's an inflationary gap. If it's negative, it's a recessionary gap. Now here, we have a large negative gap or large recessionary gap. In fact, it reaches 12 percent of potential GDP in the worst year, which was 2013. So, this is an economy that is producing 12 percent less than it was capable of in that year. But you will notice that during the entire period, there is a recessionary gap for Spain. Now, we know when there's a recessionary gap, we know how the different indicators should behave. So, you would expect inflation to slow down and I asked you in the second question to look at this.
