Inflation Persistence

65 Pages Posted: 8 Dec 2009

See all articles by Jeffrey C. Fuhrer

Jeffrey C. Fuhrer

Federal Reserve Bank of Boston; Harvard University - Harvard Kennedy School (HKS)

Date Written: November 30, 2009


This paper examines the concept of inflation persistence in macroeconomic theory. It begins with a definition of persistence, emphasizing the difference between reduced-form and structural persistence. It then examines a number of empirical measures of reduced-form persistence, considering the possibility that persistence may have changed over time. The paper then examines the theoretical sources of persistence, distinguishing "intrinsic" from "inherited" persistence, and deriving a number of analytical results on persistence. It summarizes the implications for persistence from the literature on "sticky-information" models, learning models, and so-called "trend inflation models," providing some new results throughout.

Keywords: inflation persistence, Phillips curve, autocorrelation

JEL Classification: E31, E52

Suggested Citation

Fuhrer, Jeffrey C., Inflation Persistence (November 30, 2009). FRB of Boston Working Paper No. 09-14, Available at SSRN: or

Jeffrey C. Fuhrer (Contact Author)

Federal Reserve Bank of Boston ( email )

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Harvard University - Harvard Kennedy School (HKS) ( email )

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