3  (I might proudly note in passing that the staff of the Federal Reserve System is responsible for much of this research. To avoid boring you, I will refrain from providing references to this research, but the version on this speech on the Board’s web site will include this information and will provide a more nuanced discussion of these results.)
Recent work by Jim Stock and Mark Watson (2007) provides an alternative and, to me, a quite intuitive way of thinking about inflation persistence. They estimate a model that decomposes inflation into two components.