Calculating and Studying the Velocity of Circulation

1. From the website of the Board of Governors of the Federal Reserve, download the monthly data on M2 seasonally adjusted. Average the data to get quarterly series. The data should be from the years 1959-2013.

2. From the same site get monthly data on the Federal Funds rate and the interest rate on corporate bonds Aaa. 1959-2013

3. For both series average them to get quarterly data.

4. From the bea.gov get the quarterly GDP (in current prices). 1959-2013

5. Divide the GDP by M2 to get the velocity of circulation. Graph the velocity of circulation.

6. Use Stata to regress velocity of circulation on each interest rate in turn.

7. Regress the corporate bonds rate on the Federal Funds rate.

Please explain which parts are which and label thoroughly