... respectively. Then he talks about markups, explaining how competition can affect pricing behavior and how firms can lose market and pricing power because of increments of competition in the industry. He continues talking about information technology, especially computer related improvements, explaining how the use of this field affects the pricing decision and pricing adjustment of firms. Finally, Willis explains how the changes he wrote about relate to declines or increases in inflation. Willis describes inflation dynamics with using two features (persistence and volatility), referring to volatility as the amount of inflation that changes from quarter to quarter or from year to year; and to persistence as how long it takes for inflation to return to normal. In this section, Willis discusses how inflation volatility has declined in the U.S. since 1960 to 2001. The decline in persistence of inflation started to arise in 1990, making it more severe than in the decades ...

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