Free exchange:High,wide or handsome

摘要

Inflation hawks watch measures of inflation expectations for signs that money-printing central banks are weakening price stability. Central bankers study inflation expectations just as closely: if there is little evidence of rising expectations, they can argue that the inflation genie will stay safely corked. But expectations matter not just because they show how high people assume inflation will go. They also provide a window on how unsure people are about the future path of price rises. And increasing uncertainty can inflict damage of its own. No one denies the harm that high inflation can do. After a bout of rapid price rises, a self-fulfilling process can take hold. Expecting further price rises, workers demand higher pay.