Inflation has many causes and psychology is one of them. If you think prices are going to keep rising, you will be more likely to spend your money to "lock in" the price right now. If enough people do this, it adds demand to the system which keeps prices high and prolongs inflation. If too much money in the economy alone caused inflation it would been apparent between 2008-2020.

Why is there no deflation from mass psychology?

BTW, you cannot imagine yourself into having more money.

> Why is there no deflation from mass psychology?

There is: that is the ECON101 feedback model of deflation causing money under the mattress reducing money supply causing deflation. That doesn’t occur because modern money systems don’t have a fixed supply of printed money; also governments actively prevent deflation so it isn’t seen.

“Opposite effects occur when the supply of money falls or when its rate of growth declines. Economic activity declines and either disinflation (reduced inflation) or deflation (falling prices) results”.

Rate of growth can decline due to consumer sentiment (psychology).

> BTW, you cannot imagine yourself into having more money.

Strawman.

Consumer sentiment (psychology) can become more positive, people borrow more (increase mortgages or buy a “better” house) and spend more (increasing the money supply).

Regardless of the starting point, inflation can persist due to mass psychology. See the mass psychology experiment in the mid-1990s that worked!() to constrain inflation in Brazil. They did have to introduce a new currency that was pegged against the dollar (essentially). See: https://www.bcb.gov.br/en/monetarypolicy/realplan

> It's the result of too much money sloshing around in the economy, thanks to trillions in deficit spending.

Or it's because of oil suddenly getting expensive:

* https://en.wikipedia.org/wiki/Cost-push_inflation

Cost-push inflation is a myth. The proof is that there is no general price decrease when oil prices drop.

* https://en.wikipedia.org/wiki/Nominal_rigidity