The expectations trap hypothesis

Lawrence Christiano and Christopher Gust

No 4, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: The authors examine the inflation take-off of the early 1970s in terms of the expectations trap hypothesis, according to which fear of violating the public?s inflation expectations pushed the Fed into producing high inflation. This interpretation is compared with the Phillips curve hypothesis, according to which the Fed produced high inflation as the unfortunate byproduct of a conscious decision to jump-start a weak economy. Which hypothesis is more plausible has important implications for what should be done to prevent future inflation flare-ups.

Keywords: Inflation (Finance); Phillips curve; economic conditions - United States (search for similar items in EconPapers)
Date: 2000
New Economics Papers: this item is included in nep-dge
References: Add references at CitEc
Citations: View citations in EconPapers (54)

Downloads: (external link)
https://doi.org/10.26509/frbc-wp-200004 Persistent link
https://www.clevelandfed.org/-/media/project/cleve ... p-hypothesis-pdf.pdf Full text (application/pdf)

Related works:
Journal Article: The expectations trap hypothesis (2000)
Working Paper: The expectations trap hypothesis (2000)
Working Paper: The Expectations Trap Hypothesis (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:0004

Ordering information: This working paper can be ordered from

DOI: 10.26509/frbc-wp-200004

Access Statistics for this paper

More papers in Working Papers (Old Series) from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Bibliographic data for series maintained by 4D Library ().