Inflation expectations go up quickly and easily, but come down slowly and painfully.

Question

Quizplus · Accepted Answer

This statement reflects the phenomenon known as the "stickiness" of inflation expectations, where they can become anchored and difficult to change. Expectations can be influenced by factors such as past experience, media coverage, and government policies, and once they are established, it can be challenging to shift them. As a result, reducing inflation expectations can be a slow and painstaking process.

Inflation Expectations Go Up Quickly and Easily, but Come Down