Transitory or Persistent? What the Frequency of Price Changes May Tell Us about Inflation

Christopher Cotton and Vaishali Garga

No 25-11, Current Policy Perspectives from Federal Reserve Bank of Boston

Abstract: This brief shows how distinguishing between the dynamics of frequently and infrequently adjusted prices can provide insight into the nature of inflation—whether inflation pressures are new and transitory or sustained and spreading. It breaks down the non-rent portion of the Consumer Price Index into two subindexes, one for products that change prices frequently (the flexible sector) and one for products that change prices infrequently (the sticky sector).

Keywords: sticky prices; inflation; prices; persistence; spillover; Consumer Price Index (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 (search for similar items in EconPapers)
Pages: 8
Date: 2025-08-27
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