One explanation for the rise in inflation in Sweden and many other countries in 2021-2022 is strong consumer demand, especially for services. The theory of mental accounting provides a possible explanation for this development. During the pandemic, parts of the economy were shut down, and consumption of services such as travelling and eating out fell sharply. Total household savings increased significantly. Let us now assume that households have different mental accounts for, for example, ‘home decoration and furniture’ and ‘travelling and eating out’. The amount of money in both accounts remained fairly normal during the pandemic for those households that kept their jobs. The mental account for ‘home decoration and furniture’ could be used and this consumption could be maintained, as the statistics show. However, due to self-imposed and public restrictions, the ‘travelling and eating out’ account filled up, pushing up total savings. Once restrictions were lifted, the account for travelling and eating out was full of money, which may explain the strong increase in the consumption of services after the pandemic (see Figure 2).

Figure 2. Household consumption Annual percentage change