Costing

3 Lessons from Hyperinflationary Periods

What today’s businesses can learn about pricing strategies and consumer trust.

by

and

Rose Semenov

by

and

Rose Semenov

November 30, 2022

Yaroslav Danylchenko/Stocksy

Summary.

Inflation is painful, for firms, customers, employees, and society. But careful study of periods of “hyperinflation” point to ways that firms can adapt. In particular, companies need to think about how to change prices regularly and cheaply — because constant price changes can ultimately be very, very expensive. And they should consider how to communicate those price changes to customers. Providing clarity and predictability can increase consumer trust, and help firms in the long run.

As inflation soars to its highest rates in 40 years, it’s critical that businesses have a strategy to respond to fluctuating costs and prices. Pricing during today’s inflation is particularly challenging because people are exhausted and emotionally fatigued from dealing with extreme uncertainty created by the ongoing pandemic, the war in Ukraine, and fears of recession. 

MB

Mark E. Bergen is the James D. Watkins Chair in Marketing at the University of Minnesota Carlson School of Management. He has spent over 30 years in the professoriate teaching pricing and marketing at the University of Chicago and the University of Minnesota; researching in areas ranging from Price Wars to Price Rigidity to Pricing as a Strategic Capability; and working with companies across industries ranging from Agribusiness, B2B, Health Care, and Non-Profit.
TB

Thomas Bergen is currently an MBA student, research assistant, and teaching assistant at the University of Minnesota Carlson School of Management. He previously worked at Nielsen as an analytics consultant. Over his career he has worked across CPG, Agribusiness, Travel, Insurance, B2B, and Non-profit industries to implement analytics and optimize sales performance.
DL

Daniel Levy is a Professor and William Gittes Chair at the Department of Economics at Bar-Ilan University, and a Visiting Professor of Economics at Emory University and at the ISET at Tbilisi State University. He is a senior research fellow of the ICEA and RCEA, and a Member of the Advisory Council of the Central Banks Research Association’s Research Program on “Inflation: Drivers and Dynamics.” During 2020-2022, he served as the President of the Israeli Economic Association. He is a survivor of two runaway inflations—one in Georgia (former Soviet Republic) and the other in Israel.
RS

Rose Semenov is the Assistant Director of Strategic Communications at the University of Minnesota Carlson School of Management. A storyteller at heart, she worked for nearly a decade as a broadcast journalist in the Midwest. She now strives to make academic research more accessible to a wider audience.

3 Lessons from Hyperinflationary Periods

Partner Center

Explore HBR

HBR Store

About HBR

Manage My Account

Follow HBR