-dependence; for periods of relatively high and volatile inflation not only the size of price changes (intensive margin) but also the … fraction of price adjustment (extensive margin) is important for aggregate inflation dynamics. Moreover, at the business cycle … frequency, variations in the extensive margin explain a large fraction of inflation variability even for moderate inflation …

and personal consumption expenditure inflation over three sample periods: 1959:1–1979:1, 1979:2–2001:2, and 1985 …:1–2007:2. Headline and core inflation measures are co-integrated, suggesting long-run co-movement. However, the ways these two variables … sample period, when a positive gap opens up with headline inflation rising above core inflation, the gap is eliminated mainly …