The study looked at how different types of economic shocks affect real output growth and inflation over time in the US. They found that volatility in both variables increased during World War I and stayed high until the end of World War II, then dropped rapidly until the 1960s. Temporary shocks led to a positive correlation between inflation and output growth, suggesting that changes in demand influenced inflation. On the other hand, permanent shocks led to a negative correlation between the two variables, indicating that changes in supply affected output. The findings also showed that before World War I, a permanent increase in output led to higher prices in the long term, suggesting that demand had a positive impact on output during that period.