BizJournals Portfolio
Oct 29 2007 12:00am EDT

The Return of Price Controls

In a move described by Dresdner Kleinwort as "even more predictable than the price surge that triggered it", Russia has decided to impose price controls on elected types of bread, cheese, milk, eggs and vegetable oil; the fourth word of the FT article is "Soviet-style". But in fact price controls are not solely the domain of autocratic regimes: Argentina, which had its a vibrant election yesterday, has been imposing them for some time.

Economists hate price controls, and for good reason: not only do they not work in theory, they also don't work in practice. But it does seem as though the global commodities boom, especially in the agricultural sector, must shoulder most of the blame for this latest spate of price controls. They never really went away: there was just no need for them during the Great Moderation.


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