Inflationary Expectations Do Not Cause Inflation

Inflation is often linked to rising prices due to factors like oil price hikes, influencing inflationary expectations. However, without an increase in the money supply, a general rise in prices cannot occur. Economists like Ben Bernanke focus on managing these expectations to control inflation. Milton Friedman argued that predictable inflation is less harmful than unexpected inflation. Nonetheless, the core issue is that inflation is fundamentally about the increase in the money supply, not just price rises, and its impact on the economy goes beyond just changing price levels.