For example, a prominent analysis of the US micro price data from the Great Inflation of the 1970s and early 1980s finds a substantial increase in the frequency of price changes. This was a period when the inflation rate remained above 5% for many years and inflation expectations were not well anchored.
In particular, we now know that the level of the unemployment rate relative to our real-time estimate of u* will sometimes be a misleading indicator of the state of the economy or of future inflation. Second, the reverse also seems to be true: Inflation may no longer be the first or best indicator of a tight labor market and rising pressures on resource utilization.