September 24, 2006
Old frontiers in economic policy
Repeat after me, class: price control causes a shortage. A government that tries to help consumers get bread by forcing its price down in fact makes it harder for consumers to get bread. In Zimbabwe this week, Voice of America reports:
Bread has become hard to find since the government ordered bakers last week to roll back prices and sell loaves at the official price of Z$200 dollars. Bakers have had to import their own flour and say the official price doesn’t let them recover costs.
Posted by Lawrence H. White at 01:28 PM in
Economics