Monetary policy shocks impact prices differently across sectors, changing consumer behavior.
The study looked at how prices change in different sectors of the economy and what causes these changes. They found that only a small part of price changes are due to overall economic conditions. Prices in different sectors react differently to things like changes in interest rates. When prices go down after a change in interest rates, people tend to buy less of those products. Companies with more control over prices tend to have less price changes. Some sectors are more affected by unexpected events than others. Prices and the amount of products sold often move in opposite directions.