Study Shows How Price Changes Impact Inflation Rates Across U.S. Cities
The study looked at how changes in prices in different U.S. cities can affect inflation. They found that when prices vary a lot between cities, inflation tends to go up. This suggests that supply-side factors, like changes in prices, can impact inflation. However, in the early 1980s, other factors like monetary policy had a bigger influence on inflation. The study also found that the shape of the price distribution (skewness) doesn't have a strong relationship with inflation when other economic factors are taken into account.