Inflationary Expectations and Increases in Prices – Any Relationship?

According to many, the key cause of a general increase in prices is inflationary expectations. Many commentators are of the view that, through central bank monetary policies, it is possible to bring inflationary expectations to a state of equilibrium. .the latest round of increases in energy prices has added to the upside risks to inflation and inflation expectations. It is increases in the money supply and credit expansion that underpin a general price increase, and not inflationary expectations. ConclusionInflation is not about general increases in prices and inflationary expectations but about increases in the money supply.