@techreport{NBERw7809,
 title = "The Expectations Trap Hypothesis",
 author = "Lawrence J. Christiano and Christopher J. Gust",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "7809",
 year = "2000",
 month = "July",
 URL = "http://www.nber.org/papers/w7809",
 abstract = {We explore a hypothesis about the take-off in inflation that occurred in the early 1970s. According to the expectations trap hypothesis, the Fed was pushed into producing the high inflation out of a fear of violating the public's inflation expectations. We compare this hypothesis with the Phillips curve hypothesis, according to which the Fed produced the high inflation as an unfortunate by-product of a conscious decision to jump-start a weak economy. Which hypothesis is more plausible has important implications for what needs to be done to prevent other inflation flare-ups.},
}