Our conscious memory (made up of semantic and episodic memories) allows us to remember not just what happened in the past, but also basic knowledge of things around us. Specifically, episodic memory helps us remember or reconstruct events we experienced or events that could have happened in the past but didn’t.
Indeed, research shows that recalling memory is a process of imagination – we often recreate past events in a way that isn’t necessarily accurate, but rather affected by our current beliefs and emotional state. This can make our past look even better than it was.