New study challenges traditional views on inflation determinants, changing economic models.
The article explores what drives inflation by examining how costs affect prices. By considering factors like changing technology and how businesses use resources, the researchers found that the traditional measures of cost don't fully capture the real picture. They discovered that the costs influencing prices are not as cyclical as previously thought, and including these factors in models can lead to more accurate predictions of inflation. This challenges common beliefs about what causes inflation and can help improve economic models.