In the modern era of globalization and interconnectedness, the impact of cultural events on economic indicators is increasingly gaining attention.
As of May 2023, Swedish inflation fell below 10%, with consumer prices rising by 9.7% in May year-on-year, down from 10.5% in April – the first time inflation has come in under 10% in over six months.
Michael Grahn, the chief economist for Sweden at Danske Bank – Denmark’s largest bank – has an unusual suspect for the high rise in the country’s inflation: Beyoncé.
🇸🇪 Beyonce's start of her world tour in Sweden seems to have coloured May inflation, how much is uncertain, but probably 0.2 p.p. of the 0.3 p.p that hotels/restaurants added. Perhaps also hiked concert ticket prices (recreation). Otherwise as expected.
— Michael Grahn (@MichaelGrahn1) June 14, 2023
Inflation can be understood as a situation where the prices of things you buy, like food, clothes, or electronics, go up over time. This means that with the same amount of money, you can buy fewer things than before. Sometimes, when people have more money to spend, they may start buying more things. When the demand for goods and services increases, businesses might raise their prices to make more profit. Additionally, the cost of producing goods, like wages or raw materials, can also increase, causing businesses to increase prices to cover their expenses. Inflation affects our lives because it reduces the value of money.
That said, what does Beyoncé – one of pop music’s greatest – have to do with inflation in Sweden?
In mid-May, Beyoncé kicked off her first solo tour in seven years in Stockholm, and fans from all over Sweden and beyond flocked to the capital city, eager to witness the iconic performer live on stage. The immense popularity of the event led to a surge in ticket prices, with scalpers and secondary ticketing platforms taking advantage of the high demand. As a result, many fans ended up paying exorbitant prices to secure a seat at the concert, driving up the overall consumer price index.
Beyond the local impact of the concert, the event also attracted a significant influx of tourists from abroad. Beyoncé’s global fame and stage presence enticed fans to travel to Stockholm, leading to a rise in tourism revenue. As visitors flooded the city, they indulged in various leisure activities, such as dining out, shopping, and exploring local attractions. The surge in tourist spending exerted additional pressure on the Swedish economy, contributing to the unexpected increase in inflation.
Beyoncé’s concerts are known for their spectacular production value and electrifying performances, which create a sense of euphoria and excitement among attendees. This surge in positive sentiment can often influence consumer behaviour. The Beyoncé concert in Stockholm might have acted as a catalyst, prompting Swedish consumers to loosen their purse strings and indulge in non-essential purchases, thereby further driving up inflation.
Grahn told the Wall Street Journal that the effect was “very rare” and he expected the situation to return to normal in June. However, one economist told the Financial Times that Sweden could experience a similar inflation bump when Bruce Springsteen plays three nights of concerts in Gothenburg in June.
As economists and music enthusiasts scratch their heads, attempting to unravel this unusual correlation, it becomes clear that even the most seemingly unrelated events can have unexpected consequences in the complex tapestry of the global economy.