Alison Preston of the University of Texas at Austin's Center for Learning and Memory explains:
A short-term memory's conversion to a long-term memory requires changes within the brain that protect the memory from interference from competing stimuli or disruption from injury or disease. This time-dependent process, whereby experiences achieve a permanent record in our memory, is called consolidation.
The cellular and molecular portions of memory consolidation typically take place within the first minutes or hours of learning and result in changes to neurons (nerve cells) or sets of neurons. Systems-level consolidation, involving the reorganization of brain networks that handle the processing of individual memories, can then happen on a much slower time frame of days or even years.
The consolidation process that affects declarative memories—recollections of general facts and specific events—relies on the function of the hippocampus and other medial temporal lobe structures in the brain.
At the cellular level, memory is expressed as changes to the structure and function of neurons. For example, new synapses—the connections between neurons through which they exchange information—can form to allow for communication between new networks of neurons. Alternatively, existing synapses can be strengthened to allow for increased sensitivity in the communication between two neurons.
Consolidating such synaptic changes requires the synthesis of new RNA and proteins in the hippocampus, which transform temporary alterations in synaptic transmission into persistent modifications of synaptic architecture.
With time, the overarching brain systems also change. Initially, the hippocampus works in concert with sensory-processing regions distributed in the neocortex (the outermost layer of the brain) to form the new memories. Within the neocortex, representations of the elements that constitute an event in our life are distributed across multiple brain regions according to their content. For example, visual information is processed by the primary visual cortex in the occipital lobe at the rear of the brain, whereas auditory information is processed by the primary auditory cortex located in the temporal lobes on the sides of the brain.
When a memory is first formed, the hippocampus rapidly combines this distributed information into a single memory, thus acting as an index of representations in the sensory-processing regions. As time passes, cellular and molecular changes allow for the strengthening of direct connections among the neocortical regions, enabling access to the memory independent of the hippocampus. Thus, while damage to the hippocampus from injury or neurodegenerative disorder (Alzheimer's disease, for instance) hampers the ability to form new declarative memories, such a disruption may not impair memories for facts and events that have already been consolidated.
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