The greatest psychological impact of inflation will be on Generation Z (the term used in the world for the generation born between approximately 1997 and 2012 – note of socialbites.ca). writes about this Bloomberg.
According to economist Fabrizio Bragioni, research shows that young people change their inflation expectations the most after a price increase. This may be due to family influence and local media coverage of inflation.
The young generation’s expectations regarding inflation are rapidly approaching the expectations of the elderly. This situation makes it difficult for central banks to limit price increases. Following the pandemic and the start of a special operation in Ukraine, many economists predict a more volatile inflation environment. Inflation expectations may be revised, especially among young people who have previously been immune to rising prices.
According to economist Michael Saunders, in a world where supply shocks are mostly negative, inflation expectations are likely to consolidate above target. Economists call this the “experience effect”; For people who lived through periods of instability and high prices in the 1970s and 1980s, these memories are more deeply ingrained in their thoughts than for people who know them from history books.
The experience effect is so powerful that research suggests it can even influence central bankers and be passed down from generation to generation.
The UN recently visited Europe’s is The region where the economic situation is most worrying.
Previously ECB president Christine Lagarde promise The aim is to reduce inflation in the European Union.