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Austria one century apart: Persistent effects of hyperinflation on inflation expectations

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  • Camous, Antoine
  • Garcia Soto, Natalia

Abstract

Can the memory of past inflation shape how people form expectations about prices today? Using regional inflation data from Austria’s 1921–22 hyperinflation linked to quarterly consumer surveys (May 2020–Oct 2024), we document a persistent association between historical inflation exposure and contemporary inflation expectations: individuals from regions more exposed to the historical episode report higher inflation expectations a century later. We further show that regional newspapers in historically high-inflation areas devote greater attention to inflation, suggesting local media environments contribute to the intergenerational transmission of inflation attitudes. The collective memory of major inflation episodes can durably shape expectation formation.

Suggested Citation

  • Camous, Antoine & Garcia Soto, Natalia, 2026. "Austria one century apart: Persistent effects of hyperinflation on inflation expectations," Economics Letters, Elsevier, vol. 267(C).
    • Handle: RePEc:eee:ecolet:v:267:y:2026:i:c:s0165176526002880
    DOI: 10.1016/j.econlet.2026.113094
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    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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