The article explores how different types of economic shocks affect output and prices. The researchers find that if a permanent increase in output leads to higher prices, then demand shocks have a positive long-term impact on output. They also show that permanent shocks have a bigger impact on output variability than supply shocks when demand shocks have a positive effect in the long run. Additionally, they demonstrate that permanent and temporary shocks affect prices and output similarly to supply and demand shocks from basic economics.