High inflation can result in reduced purchasing power and increase uncertainty among people and businesses. Future spending becomes more difficult to plan, and setting the right price of products becomes more challenging for businesses.
If inflation remains at an elevated level over a long period, this may result in a self-reinforcing spiral of continuously rising prices and wages. It would then be increasingly difficult to plan ahead and retain purchasing power.
When inflation is very high, as a rule, there are continuous substantial price changes. Wages paid can then lose much of their value over a short period of time. In such cases, a currency becomes virtually impossible to use and may result in a breakdown of the monetary system.
In the 1970s and 1980s, Norway and other countries experienced such a high inflationary period. To stop the self-reinforcing spiral, the authorities had to slam on the breaks, implementing high interest rates and reducing public spending. In the wake of this period, the Norwegian economy underwent a period of high unemployment and financial turbulence.