In addition, households that fear high inflation are expected to reduce the amount of money they hold and keep more of their wealth in real assets such as land or gold, which are considered better hedges against inflation. Inflation also raises the effective tax rate on income earned from investing and saving. As a result, people may invest less and save less. However, at present there is little direct empirical evidence of the strength and nature of these theoretical links. These are important questions, and a variety of approaches can be brought to bear to answer them. Surveys, field experiments and experiments in the lab can all be very useful to further our understanding of these issues, which lie at the heart of the mandate of any central bank. Of course many economists are perhaps appropriately sceptical about whether the results from many experiments can be generalized. Some recent results from our survey might reassure some of these economists. Working with the Rand Corporation, which runs the Internet survey for our inflation questions, we designed an experiment involving nominal future payoffs to assess whether the responding households would behave in ways consistent with their reported inflation expectations. The results confirmed that on average households used a real interest rate based on their reported inflation expectation in choosing between the nominal future payoffs. Thank you for listening to me today. I would be happy to take some questions on our research on inflation expectations.
What implications will these changes have for the entire payments ecosystem? And what further adjustments will the cashless payment system have to undergo if it is to remain efficient and secure in the future? 4 5 6 7  Allsopp, Peter et al. (2009), The evolution of real-time gross settlement – access, liquidity and credit, and pricing, The World Bank Financial Infrastructure Series – Payment Systems Policy and Research, February 2009. Interbank payments comprise payments relating to FX operations or money and capital market transactions, but also large-value payments transacted by the non-bank sector. PostFinance’s decision in 2016 to settle all of its domestic payments via SIC in future has also significantly increased the volume of retail payments in the SIC system. The recent SNB survey on payment methods shows that cash continues to play an important role in payments in Switzerland. However, a large proportion of payments by households is now conducted via credit card, and above all via debit card. Swiss National Bank (2018), Survey on payment methods 2017 – Survey on payment behaviour and the use of cash in Switzerland. Page 5/9  Before turning to these important questions, I should emphasise that I will not be talking about cryptocurrencies such as Bitcoin or Ether. 8 The question I will focus on today is: how is digitalisation changing payment systems? One important finding is that the changes being wrought by digitalisation are affecting the entire payments ecosystem.