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Using a vector autoregression that allows for time-varying parameters and stochastic volatility, we show that U.S. core inflation became 75 percent less responsive to shocks in food prices since the late 1970s. The decline in the pass-through of food price shocks to inflation is a result of a decline in both volatility and the persistence of food price changes in inflation. This decline in pass-through coincides with a period of increasing concentration in the food supply chain, especially among U.S. grocery retailers and distributors. We find that 60 percent of the variation in pass-through over the last four decades can be explained by changes in food retailers and distributors market concentration. Controlling for the composition of the food basket and inflation expectations explains an additional 20 percent of the variation. Our results suggest that if the market concentration of food retailers and distributors continues to increase and inflation expectations remain well-anchored, the pass-through of food price shocks to inflation will likely remain subdued.

The number of U.S. coal-fired power plants declined by nearly 250 between 2001 and 2018. Given that burning coal generates large amounts of particulate matter is known to have adverse health effects, closure of coal-fired power plants should improve local air quality. Using spatial panel data from air quality monitor stations and coal-fired power plants, we estimate the relationship between plant closure and local air quality. We find that on average, the levels of particulate matter within 25 and 50 mile buffers around air quality monitors declined between 7 and 14 percent with each closure. We estimate that the event of closure is associated with a 0.6 percent decline in local mortality probabilities. On a value of statistical life basis, the median local benefit of coal power plant closure ranged between $1 and $4 billion or 5 to 15 percent of local GDP since the early 2000s.

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