<p>I am interested in inflation, specifically hyperinflation. Can anybody point me to research (papers, books) done on the <em>individual</em> origins and mechanisms at work at the very beginning of hyperinflation -i.e. what drove specific persons to raise the price of their specific goods or services, who went first, what were the informational channels on which individuals received their news of prices going up, etc.</p>
<p>Every hyperinflation-event would play out different, of course, but i'd like to read up on at least one (ideally recent (1900 onwards) one) on an individual level.</p>
<p>This might veer into the territory of historians, but possibly there is also some economics literature out there that covers this?</p>

CC BY-SA 4.0
2021-07-22T14:35:38.107Z
This needs some details and clarity what exactly you mean here by individual? This question seems to be predicated on fallacy of composition. Inflation is macroeconomic phenomenon, no individual is directly responsible for it or causes it (policy makers aside), it would be like saying that some specific individual is responsible for climate change, you can drive the worse gas-guzzler if you are the only one doing it you have no effect on global climate, it requires millions of people doing it to have an impact. Likewise, inflation is not caused by individuals but by aggregate price changes.
1muflon1
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2021-07-22T14:41:18.233Z
Also, hyperinflation is not a modern phenomenon. Ancient Rome had hyperinflation at some point, coming from seignorage (gradually reducing the valuable silver content of the coins from close to 100% to virtually zero).
BrsG
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2021-07-22T14:53:38.727Z
@1muflon1 with 'individual' i mean 'person' -i.e. is there research into when and on what grounds e.g. Jeb Smith decided to rise the price of the apple he sold during the hyperinflation of 19xx. Economics is a macro phenomenon, but mechanics is likewise. nevertheless, some people delve into molecular interactions to explain macro-phenomena like, crack propagation.
loonquawl
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2021-07-22T14:55:50.260Z
@BrsG the economic system of antiquity is so extremely far removed from the current state that it's not of interest for me in this regard. Also, sources for the kind of personalized activity i am looking for are certainly too scarce.
loonquawl
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2021-07-22T14:57:41.257Z
@loonquawl there is research about individual firm price setting but that research does not really explains hyperinflation. One firm might increase prices by billions of % and it might have no effect on inflation. Moreover, there is nothing that would suggest that on a fundamental level individual firms set prices via different mechanisms during hyperinflation than during non-inflationary or deflationary periods. The mechanisms are same just macroeconomic shocks and macro fundamentals are different.
1muflon1
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2021-07-22T15:08:19.370Z
For example, a monopoly firm would optimally select price at a point where quantity produced determined minimum point of ATC is (same point as where MC=MR) intersects demand curve and it will do so regardless of whether there is inflation or not or hyperinflation. Inflation just changes the parameters of the price setting behavior not price setting behavior itself.
1muflon1
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2021-07-22T15:48:53.123Z
@1muflon1 You are talking about theory. OP is asking for historical interviews.
Giskard
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2021-07-22T16:06:14.167Z
@Giskard but OP talks about mechanisms in the question interview is not mentioned even once and if that’s the case history SE might be better place
1muflon1
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2021-07-22T16:07:33.783Z
Don't know how you could know about an individual's state of mind other than an interview. "*what drove specific persons to raise the price of their specific goods or services [...] what were the informational channels on which individuals received their news of prices going up*"
Giskard
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2021-07-22T16:12:06.440Z
I agree that [History.SE] might be a better fit for this question (this is unfortunate in my opinion).
Giskard
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2021-07-22T16:13:03.987Z
@Giskard well the question does not really ask about that either, as I read it it asks about the mechanisms or what the incentives were. Interview might be good way of understanding how individuals feel about their decisions but it’s not really good way of understanding their incentives given all the biases in the answers that exists when people questioned plus people tend to do post hoc rationalizations. You can also understand people’s incentives via observation and experimentation in lab, you can always also hook up person to a machine like neuroeconomists do
1muflon1
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2021-07-22T16:14:20.083Z
@1muflon1 I edited [my comment](https://economics.stackexchange.com/questions/45930/is-there-research-on-the-level-of-individuals-regarding-the-origins-of-hyperinfl?noredirect=1#comment75034_45930) to show that OP asked about this. I agree that survey results should be treated with caution.  Also, neuroeconomics is a great tool to study historical questions if you also get access to the Economics Faculty's time machine.
Giskard
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2021-07-22T16:18:34.283Z
@Giskard let’s see what OP comments on this, if OP wants to know some historical meta narrative on what people felt when they were doing price setting in past I think best course of action is to move it to History.SE because I don’t think that would even qualify as economic history
1muflon1
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2021-07-22T16:40:48.287Z
@1muflon1 as I interpret it, loonquawl does not care about any particular event, but wants an answer to the general question by referring to concrete instances, e.g. "Monopolies do X - when Microsoft was a monopoly on Y, they did X in the specific manner Z" rather than "Monopolies do X because that's what my mathematical model predicts."
Criticize SE actions means ban
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2021-07-23T12:52:35.647Z
@1muflon1 :  user253751 and Giskard  both have it partly right: I want concrete examples of the invisble hand at work - not 'just' individuals' feelings, but also diaries, letters, memos, the whole shebang of traditional sources; That prices fluctuate, and thereby not every price hike is part of, or is reflected in, inflation, is a given. Some people will have hiked the prices of their goods/services in times of negative inflation as well, it's just noise, but over a number of subjects (not 'over' as in mean, but in a study comprising multiple subjects) for a timeframe of hyperinflation.
loonquawl
<reference-request><inflation><economic-history><research>
Is there research on the level of individuals regarding the origins of hyperinflation?
loonquawl
# Is there research on the level of individuals regarding the origins of hyperinflation?

(Asked by: username_0 on 2021-07-22)

I am interested in inflation, specifically hyperinflation. Can anybody point me to research (papers, books) done on the *individual* origins and mechanisms at work at the very beginning of hyperinflation -i.e. what drove specific persons to raise the price of their specific goods or services, who went first, what were the informational channels on which individuals received their news of prices going up, etc.

Every hyperinflation-event would play out different, of course, but i'd like to read up on at least one (ideally recent (1900 onwards) one) on an individual level.

This might veer into the territory of historians, but possibly there is also some economics literature out there that covers this?

**Tags:** reference-request, inflation, economic-history, research

> **Comments:**
> **username_1**: This needs some details and clarity what exactly you mean here by individual? This question seems to be predicated on fallacy of composition. Inflation is macroeconomic phenomenon, no individual is directly responsible for it or causes it (policy makers aside), it would be like saying that some specific individual is responsible for climate change, you can drive the worse gas-guzzler if you are the only one doing it you have no effect on global climate, it requires millions of people doing it to have an impact. Likewise, inflation is not caused by individuals but by aggregate price changes.  
> **username_2**: Also, hyperinflation is not a modern phenomenon. Ancient Rome had hyperinflation at some point, coming from seignorage (gradually reducing the valuable silver content of the coins from close to 100% to virtually zero).  
> **username_0**: @username_1 with 'individual' i mean 'person' -i.e. is there research into when and on what grounds e.g. Jeb Smith decided to rise the price of the apple he sold during the hyperinflation of 19xx. Economics is a macro phenomenon, but mechanics is likewise. nevertheless, some people delve into molecular interactions to explain macro-phenomena like, crack propagation.  
> **username_0**: @username_2 the economic system of antiquity is so extremely far removed from the current state that it's not of interest for me in this regard. Also, sources for the kind of personalized activity i am looking for are certainly too scarce.  
> **username_1**: @username_0 there is research about individual firm price setting but that research does not really explains hyperinflation. One firm might increase prices by billions of % and it might have no effect on inflation. Moreover, there is nothing that would suggest that on a fundamental level individual firms set prices via different mechanisms during hyperinflation than during non-inflationary or deflationary periods. The mechanisms are same just macroeconomic shocks and macro fundamentals are different.  
> **username_1**: For example, a monopoly firm would optimally select price at a point where quantity produced determined minimum point of ATC is (same point as where MC=MR) intersects demand curve and it will do so regardless of whether there is inflation or not or hyperinflation. Inflation just changes the parameters of the price setting behavior not price setting behavior itself.  
> **username_3**: @username_1 You are talking about theory. OP is asking for historical interviews.  
> **username_1**: @username_3 but OP talks about mechanisms in the question interview is not mentioned even once and if that’s the case history SE might be better place  
> **username_3**: Don't know how you could know about an individual's state of mind other than an interview. "*what drove specific persons to raise the price of their specific goods or services [...] what were the informational channels on which individuals received their news of prices going up*"  
> **username_3**: I agree that [History.SE] might be a better fit for this question (this is unfortunate in my opinion).  
> **username_1**: @username_3 well the question does not really ask about that either, as I read it it asks about the mechanisms or what the incentives were. Interview might be good way of understanding how individuals feel about their decisions but it’s not really good way of understanding their incentives given all the biases in the answers that exists when people questioned plus people tend to do post hoc rationalizations. You can also understand people’s incentives via observation and experimentation in lab, you can always also hook up person to a machine like neuroeconomists do  
> **username_3**: @username_1 I edited [my comment](https://economics.stackexchange.com/questions/45930/is-there-research-on-the-level-of-individuals-regarding-the-origins-of-hyperinfl?noredirect=1#comment75034_45930) to show that OP asked about this. I agree that survey results should be treated with caution.  Also, neuroeconomics is a great tool to study historical questions if you also get access to the Economics Faculty's time machine.  
> **username_1**: @username_3 let’s see what OP comments on this, if OP wants to know some historical meta narrative on what people felt when they were doing price setting in past I think best course of action is to move it to History.SE because I don’t think that would even qualify as economic history  
> **username_4**: @username_1 as I interpret it, username_0 does not care about any particular event, but wants an answer to the general question by referring to concrete instances, e.g. "Monopolies do X - when Microsoft was a monopoly on Y, they did X in the specific manner Z" rather than "Monopolies do X because that's what my mathematical model predicts."  
> **username_0**: @username_1 :  user253751 and username_3  both have it partly right: I want concrete examples of the invisble hand at work - not 'just' individuals' feelings, but also diaries, letters, memos, the whole shebang of traditional sources; That prices fluctuate, and thereby not every price hike is part of, or is reflected in, inflation, is a given. Some people will have hiked the prices of their goods/services in times of negative inflation as well, it's just noise, but over a number of subjects (not 'over' as in mean, but in a study comprising multiple subjects) for a timeframe of hyperinflation.  

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## 0 answers

