Americans are Expecting Inflation to Decline from Current Levels

Here’s How I Know That and Why It’s Important

Inflation is an increase in the general level of prices. As Milton Friedman declared, this is a monetary phenomenon. There are reasons why this is bad, such as the wage-price spiral and the observation that inflation is autoregressively heteroskedastic (meaning that changes in inflation lead to increased uncertainty about future inflation), but current monetary policy accepts that “a little inflation” is considerably better for an economy than…