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Austria One Century Apart: Persistent Effects of Hyperinflation on Inflation Expectations

Author

Listed:
  • Antoine Camous
  • Natalia Garcia Soto

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 hyperinflation 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 that local media environments contribute to the intergenerational transmission of inflation attitudes. These findings indicate that the collective memory of major inflation episodes can durably shape expectation formation, with implications for managing heterogeneous regional responses during inflationary episodes.

Suggested Citation

  • Antoine Camous & Natalia Garcia Soto, 2026. "Austria One Century Apart: Persistent Effects of Hyperinflation on Inflation Expectations," Working papers 1050, Banque de France.
    • Handle: RePEc:bfr:banfra:1050
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    File URL: https://www.banque-france.fr/system/files/2026-07/WP1050.pdf
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    Keywords

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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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