Over the past twenty years, abundant attention has been given, both in professional journals and in the popular press, to the wealth redistribution which occurs as a result of unanticipated inflation. Less widely known but equally detailed work has been done on the characteristics and allocative effects of perfectly anticipated inflation. There have been, however, few examinations of the effects of revisions in inflationary expectations and the adjustments which accompany them. It may be that this is due to the belief that such revisions take place extremely gradually, as was indicated by most empirical studies based on adaptive expectations hypotheses, so that their effects would be negligible in magnitude.