Monetary policy changes drive U.S. inflation persistence, study finds.
The study shows that changes in how the Federal Reserve Bank manages inflation and the economy can explain why U.S. inflation behaved differently from 1975 to 2010. By looking at how the Fed's priorities shifted during this time, researchers found that these changes directly impacted how long inflation stuck around. This suggests that inflation persistence is not a fixed feature of the economy, but can be influenced by how policymakers make decisions.