We previously described the literature on the importance of experience for economic agents.^[48] For an overview, see Malmendier (2021). Individuals who have experienced dramatic economic events are affected by them for a long time afterwards. This also applies to episodes of high inflation.^[49] See Salle et al (2024). Research shows that monetary policy-makers are also influenced by their experiences. For example, there are indications that members of the Federal Reserve’s Monetary Policy Committee who had experienced the Great Inflation in the 1970s and 1980s favoured tighter monetary policy than younger members who had not.^[50] See Malmendier et al. (2020).

In Sweden, we experienced a nearly 30-year period of low and stable inflation until the recent upturn. This meant that younger generations had no memory of high inflation, as it had last occurred in the early 1990s. This has changed with the recent rise in inflation. We now see inflation falling and approaching the target in many countries, including Sweden. An interesting question for the future is whether the economy will behave similarly when inflation is back on target or whether the period of high inflation may have had lasting effects. The research suggests that the experience of high inflation may have affected households, companies and economic policy-makers for a long time to come.