On this front, a lesson can be learned from the U.S. experiences of an anti-inflationary policy through bold monetary tightening adopted by then 4  BIS central bankers’ speeches  Federal Reserve Chairman Paul Volcker in the late 1970s to the early 1980s. At that time, until around 1983 economic recession caused a continuous decline in households’ expected income DI over the next year.
At the same time, however, both actual inflation and inflation expectations dropped sharply, and thus real income and its outlook improved instead and partially contributed to an improvement in consumption.