It has been common for central banks to adopt a policy of targeting on or fixing the nominal interest rate. Under this policy a shock to the monetary sector that causes a rise in the interest rate would prompt the central bank to increase the money supply to push the interest rate back down. The increase in the money supply may cause people to revise expected inflation upward, a revision reinforced by any actual price increases created by the extra money, which are likely to occur if the economy is near full employment. Higher expected inflation increases the nominal interest rate. Any success the central bank has in pushing down the nominal interest rate will be temporary and likely to be more than offset by a rise in expected inflation. This rise in the interest rate prompts the central bank to increase again the money supply to meet its target interest rate, thus leading to a vicious circle. By targeting on the interest rate, the central bank loses control of the money supply.