If, for instance, an expected permanent future increase in productivity induces agents to expect higher income in the future, they will try to smooth consumption by already raising their consumption level in the present. In a flexible price equilibrium, the natural real interest rate would rise, increasing current desired savings in order to equate the current consumption level and current natural output again.
However, if the actual real interest rate does not rise sufficiently, there will be a negative interest rate gap, which increases the current output gap – that is, stimulates the economy too much – which in turn leads to inflationary pressure.