# Expectation paradox, monetary (paradox of monetary confidence)

- Canonical URL: https://www.gerhardmerk.de/expectation-paradox-monetary-paradox-of-monetary-confidence
- Post ID: 594250
- Modified: 2023-07-25T20:59:31+00:00
- Language: en

## Definition

If a central bank credibly commits itself to price stability, this demonstrably leads to a lower actual inflation rate. This is because economic agents do not prefer (credit-financed) purchases because of higher inflation expectations. Also, wage adjustments fall lower, which continues to lead to lower inflation. - See cost-push inflation, wage-price spiral, open-mouth policy, signaling effect. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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