defined as the prediction from a statistical model of the level to which inflation is projected , onceurn in the long run the effects of any shocks of the economy have fully played out. as can be seen from this figure, this estimated trend drifts higher over the 1960's and 1970's. this implies that during this period there was no stable anchor to which inflation could be expected to return. that is the conclusion generally supported by other prestigious economists will say that these features of inflation in the late 19 axes and 1970's, it is high level and lacks a stable anchor, reflected a combination of factors, including chronically overheated labor and product markets, the effects of the energy and food emergenceks, and the of an inflationary psychology, whereby a rise in actual inflation led people to revise up their expectations for future inflation. together, these various factors caused inflation, actual and expected, to ratchet higher overtime. ultimately, however, monetary policy bears responsibility to the broad contour of what happened to inflation during this. riod because t