For example, if the public is made to expect higher inflation and does not believe in the ability of the Central bank to reign in on this inflation; it will result in a self-fulfilling episode where firms will adjust their prices, leading to higher actual inflation.
133, Consolidated Appropriations Act, 2021, Public Law 116-260, Enacted on December 27, 2020,” January 14, https://www.cbo.gov/system/files/2021-01/PL_116-260_Summary.pdf; and Congressional Budget Office (2021), “Estimated Budgetary Effects of H.R. 1319, American Rescue Plan Act of 2021, As passed by the Senate on March 6, 2021,” summary tables, March 10, https://www.cbo.gov/system/files/202103/Estimated_Budgetary_Effects_of_HR_1319_as_passed_0.pdf.