"I think that the price level and rate of inflation are literally indeterminate. They are whatever people think they will be. They are determined by expectations, but expectations follow no rational rules. If people believe that certain changes in the money stock will cause changes in the rate of inflation, that may well happen, because their expectations will be built into their long term contracts."
"In my model of the international economy, changing relative prices become noise that makes it difficult to see that demand and supply conditions are largely independent of price levels and exchange rates."
"I think that the price level and rate of inflation are literally indeterminate. They are whatever people think they will be. They are determined by expectations, but expectations follow no rational rules. If people believe that certain changes in the money stock will cause changes in the rate of inflation, that may well happen, because their expectations will be built into their long term contracts."
Fischer Black, "Noise"
"In my model of the international economy, changing relative prices become noise that makes it difficult to see that demand and supply conditions are largely independent of price levels and exchange rates."
Ibid.