Why price control doesn’t usually work

by John Quiggin on August 26, 2015

Another extract from my book-in-progress, Economics in Two Lessons. You can find a draft of the opening sections here. To recap, the idea of the book is to begin with the idea that market prices represent opportunity costs for the households and business who face them (Lesson 1), and then go on to explain why market prices won’t in general equal opportunity costs for society as whole (Lesson 2). A lot of the book will be applications of the two lessons, and this section is an application of Lesson 1. The title of this section is self-explanatory, so I’ll throw it open for comments. Praise is welcome, useful criticism even more so.

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