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The Evolution of Disagreement About Long-Run Inflation, 2007–24
In this article, we examine disagreement about long-run U.S. inflation in two closely watched surveys over the period 2007–24.1 This was a tumultuous period. The economy was hit by two very large shocks: the Global Financial Crisis (GFC) in 2007–08 and the Covid-19 pandemic in 2020–21. Unemployment soared from 5% to 10% over the 2008–09 period and took six years to reach pre-crisis levels. In March 2020, unemployment surged to 10% from historically low levels, but it returned to pre-pandemic levels in the second half of 2021. Inflation ran below 2% from early 2008 until early 2021, ...