Finance Geek

There is consensus among economists that tampering with prices is not an efficient way to run an economy. Price controls that keep the price below what individuals are voluntarily agreeable to contract for, eg., rent control, are widely recognized to be inefficient in that such price controls encourage too much consumption of the subject product, and discourage too little production of the subject commodity. On the flip side, price controls that keep the price above what individuals are willing to pay, eg, price supports for sugar, are widely thought to be an inefficient subsidy through which…

More…

This entry was posted on Monday, October 31st, 2011 at 4:49 pm and is filed under RealClearMarkets. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.