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Topic: Price controls

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  Price Controls, by Hugh Rockoff: The Concise Encyclopedia of Economics: Library of Economics and Liberty
But despite the frequent use of price controls, and despite the superficial logic of their appeal, economists are generally opposed to them, except perhaps for very brief periods during emergencies.
Prices in fl markets may be above not only the official price, but even the price that would prevail in a free market, because the buyers are unusually desperate and because both buyers and sellers face penalties if their transactions are detected.
Price controls may limit these costs of disinflation by prohibiting wage increases that are out of line with the new trends in demand and prices.
www.econlib.org /library/Enc/PriceControls.html   (2419 words)

 Pfizer | Public Policy Home | Pricing and Value | Price Controls
Price controls are undesirable for a number of reasons, most notably their negative effects on the incentives to conduct research and development of new medicines.
Price controls lead to increased waiting times for medicines or a lack of availability of medicines in price controlled countries.
A study by the U.S. Dept of Commerce, which was published in December 2004, found that price controls imposed by OECD countries in the study reduce global R&D expenditures by $5 billion to $8 billion annually (the equivalent of 11 to 16 percent of annual private worldwide pharmaceutical R&D).
www.pfizer.com /pfizer/policy/pricecontrols.jsp   (573 words)

 The Folly of Price Controls
Price caps also "could double the number of rolling flouts from 113 to 235 hours and increase the number of households in the dark to about 1.575 million," the study says.
Diocletian imposed wage and price controls and ordered that anyone who violated the controls or withheld goods from the market be killed.
From the time of the Continental Army, when price controls nearly brought a ruinous end to the American Revolution, to the 1970s, when President Nixon attempted to overcome creeping inflation with wage and price freezes, American consumers have taken their lumps from these failed policies.
www.heritage.org /Press/Commentary/ed070301.cfm   (745 words)

 Price Controls
Recent history indicates that governments have fixed the price of gasoline, rent, and the minimum wage, to name a few, with war usually the reason for general price controls.
Wage and price control measures, as well as regulating the hiring and firing of workers, was also initiated by the government.
Price and production controls may have accomplished many things toward the end of the war, but they did not account for the speed and magnitude of their initial impact.
www.u-s-history.com /pages/h1689.html   (1189 words)

 History and Analysis -Crude Oil Prices
The decline in the price of crude when adjusted for inflation was amplified for the international producer in 1971 and 1972 by the weakness of the US dollar.
In 1972 the price of crude oil was about $3.00 per barrel and by the end of 1974 the price of oil had quadrupled to over $12.00.
The higher prices faced by consumers would have resulted in lower rates of consumption: automobiles would have had higher mileage sooner, homes and commercial buildings would have been better insulated and improvements in industrial energy efficiency would have been greater than they were during this period.
www.wtrg.com /prices.htm   (3407 words)

 TCS Daily - Bell Bottom Blues
Energy price controls, embraced in the 1970s by Presidents Nixon and Carter, were a bipartisan failure.
Prices for gasoline have been driven higher still as Katrina disrupted its supply by laying waste to the Gulf Coast, a major shipping and refining region.
It would be absurd to accuse lumberjacks of "price gouging" or insist on timber price controls or a tax on "windfall profits" for timber producers as prices rise due to increased demand.
www.tcsdaily.com /article.aspx?id=091905B   (944 words)

 Competition and the Effects of Price Controls in Hawaii's Gasoline Market
Price controls usually create shortages, reduce quality, and generate inconvenience for consumers when they are imposed in markets that could be competitive.
If rent controls have the effect of reducing the total revenues that a wholesaler receives from dealers, then the wholesaler is likely to have fewer dealer-operated stations than it would in the absence of the rent control and to spend less money maintaining the stations.
Though not identical to the price controls in Act 77, the federal controls were similar in two key ways: (1) they applied both to wholesale and to retail prices, and (2) prices were adjusted based on costs.
www.ftc.gov /be/v030005.htm   (3925 words)

 Four Thousand Years of Price Control - Mises Institute
Ancient Greece also imposed price controls on grain and established "an army of grain inspectors appointed for the purpose of setting the price of grain at a level the Athenian government thought to be just." Greek price controls inevitably led to grain shortages, but ancient entrepreneurs saved thousands from starvation by evading these unjust laws.
Price controls were finally ended in Germany by Economic Minister Ludwig Erhard in 1948, on a Sunday, when the American occupation authorities would be out of their offices and unable to stop him.
Price controls were the cause of the "energy crisis" of the 1970s and of the California energy crisis of the 1990s (only the wholesale price of electricity was deregulated there; controls were placed on retail prices).
www.mises.org /story/1962   (1016 words)

 Guaranteed Pain and Suffering: The Recent Research on Drug Price Controls
The study found that price controls in OECD countries caused a $5 billion to $8 billion annual reduction in funding for drug research and development.
Not only would price controls add to the delay in the development of drugs and eliminate any number of new drugs, they would also cause a delay in the introduction of new drugs into the market.
The use of price controls to combat rising costs is an ancient prescription, and in the case of prescription drugs, one that is practiced in much of the rest of the world.
www.heritage.org /Research/HealthCare/wm908.cfm   (1253 words)

 Econlog, Price Controls Archives: Library of Economics and Liberty
Controls on oil and other products often tend to be limited or short-lived, as voters eventually object to the resulting shortages and distortions.
The effects of drug price controls, however, are far more difficult to observe because they mainly affect medicines that haven't been invented yet.
He points out that rent control leads to a vicious cycle, in which price controls create scarce supplies, which increases the political pressure for controls.
econlog.econlib.org /archives/cat_price_controls.html   (3234 words)

 Price Controls and Grandma’s Medicine - by Conrad F. Meier - The Heartland Institute
When price controls were lifted, inflation burst out in the open and consumer prices soared.
After the energy price controls of the ‘70s were lifted, the long gas lines disappeared and the price of a gallon of gas (less federal and state taxes) fell sharply.
If drug price controls like those being discussed and implemented today had been legislated just 10 years ago, many valuable drugs would not be in Grandma’s medicine cabinet today.
heartland.org /Article.cfm?artId=688   (802 words)

 NCPA Health Care - Price Controls
Price controls also are used in the Medicaid program, where it is not uncommon for government to pay as little as 50 cents on the dollar for services for low-income patients.
Hospitals there are among the financially sickest in the nation as a result of state price controls, a federally-backed building spree, huge amounts of debt, no money to pay the bills and fewer patients staying shorter periods.
The state's price control system allows hospitals to jack up patient prices in the early years of a construction loan -- thereby encouraging hospitals to build more and more unneeded facilities.
www.ncpa.org /w/w30.html   (914 words)

 Calblog: Price Controls on gas
This week, Cruz Bustamante suggested price controls on gasoline and, as the Bee reported, "experts" jumped all over him.
Because prices were limited, no one curtailed their driving (we didn't drive a lot but we didn't drive a lot before that) and demand remained high, while supply, although not at any REAL shortage levels, was less than that demand and there was an artificially imposed shortage.
Price controls only make sense in markets which (a) are monopolies; (b) have a high barrier to entry (preventing new entrants from competing with the monopoly); and (c) exhibit extremely low price elasticity of demand.
www.calblog.com /archives/002683.html   (611 words)

 Why Price Controls are the Wrong Prescription   (Site not responding. Last check: 2007-10-21)
The relative lack of restrictive price controls in the U.S. has made it the leader in pharmaceutical innovation.
The U.S. should reject price control policies that would weaken RandD, particularly since the experience of foreign countries demonstrates that price controls don’t work.
Price controls have increased health-care spending and decreased RandD in Germany, Japan, and Canada.
www.pacificresearch.org /pub/act/2001/act_01-06-13a.html   (650 words)

 Price Controls Can Be Deadly
The artificially low price has a twofold effect: it causes supplies to be withheld from the market and it induces people to consume more than they ordinarily would.
When the federal government finally lifted its price controls here in the United States, the price quickly rose to the free-market level and the lines disappeared.
In Iraq, simply lifting the price controls would not solve the problem because the central planners would still be faced with the problem of constantly guessing what the free-market price should be in all the government-owned gas stations.
www.fff.org /comment/com0312d.asp   (605 words)

 Price Controls and Other Nixonian Evils by Anthony Gregory
What Bush will do is up in the air, but he has caved in on energy price controls in the past, and his recent denunciation of "gouging" is troubling.
Of Richard Nixon’s vast repertoire of domestic assaults on liberty and the free market, price controls on oil were among his most evil and destructive.
In the midst of economic stagnation surely related to his guns and butter, inflationism, devaluation of the dollar and his closing of the gold window, the Republican called down from on high and decreed that the laws of supply and demand be repealed.
www.lewrockwell.com /gregory/gregory89.html   (804 words)

 NCPA - Regulation Issues - The Problem With Price Controls   (Site not responding. Last check: 2007-10-21)
For instance, after President Nixon imposed price controls in 1971, inflation fell from the 6 percent range to the 3 percent range.
Controls break down in part because so many exceptions must be made for the economy to function.
Temporary controls are likely to last much longer than anyone imagines, because the threat of catch-up price increases will be politically intolerable.
www.ncpa.org /pd/regulat/pd071601a.html   (344 words)

 Incomes policy - Wikipedia, the free encyclopedia
By arbitrarily interfering with price signals, they provide an additional bar to achieving economic efficiency, potentially leading to shortages and declines in the quality of goods on the market, while requiring large government bureaucracies for their enforcement.
U.S. President Richard Nixon imposed price controls during the 1973 energy crisis in several "Phases" (Phase I to Phase III).
Congress later agreed to remove price controls in phases; they were finally dismantled in 1981 under President Ronald Reagan.
en.wikipedia.org /wiki/Price_controls   (487 words)

 Economics With A Face: Price Controls Archives
For a brief moment Shuster got close to the true source of the crisis by noting that the price on the fl market was 10 times the price that Iraqis "preferred" to pay at the government stations.
I assume the price is now controlled by the interim Iraqi government but the evidence suggests that not much has changed.
But once the price controls were lifted in one of the first acts of the Reagan administration, prices soon fell to below the former government regulated price.
www.economicswithaface.com /weblog/archives/price_controls/index.html   (879 words)

 Hawaii Gives Up on Gas Price Controls - CBS News
Those caps were based on the average of prices in Los Angeles and New York and on the Gulf Coast.
Prices jumped up 20 cents in the last couple of days," said Calvin Reddick, who paid $15 for just over four gallons of gas for his Volkswagen Beetle.
Rather than forcing down gas prices with a lower price ceiling, the mostly Democratic Legislature suspended the cap and gave Lingle, who had opposed any regulation of gas prices, the power to bring it back if she decides fuel has gotten too expensive.
www.cbsnews.com /stories/2006/05/08/ap/national/mainD8HFSCNO3.shtml   (725 words)

 Christian Politics - Christianity and Price Controls in Medicine
This would effectively set prices in America at whatever level foreign governments have established, as Americans could simply purchase the imported drugs for whatever they cost overseas, preventing any American firm from charging a higher price.
Price controls will permit people to buy any drug currently on the market for relatively low prices, but it will end any chance of developing new drugs to cure illnesses we cannot currently cure.
Price controls do not, and Christians have no moral or religious basis for supporting them.
www.evangelsociety.org /sherk/pricecontrol.html   (1092 words)

 Article | Price controls stifle drug development
After careful study of the continent's price controls, the EU feels Europeans pay too little for their drugs.
Late last month, when European health ministers were being advised of the importance of drug pricing freedom, the House approved a bill on drug reimportation by a whopping margin, 243-186.
Price controls, such as the ones used in Canada and Europe, kill research and development.
www.manhattan-institute.org /html/_chicsuntimes-price_controls.htm   (798 words)

 FOXNews.com - Hawaii Caps Oil Prices - Economy
The limit would be the first time a state has capped the price of gasoline — a move critics warn could lead to supply shortages.
The caps are based on a baseline price calculated from the five-day average of spot rates from three mainland markets: Los Angeles, New York harbor and the U.S. Gulf Coast.
The governor has the power to suspend the price caps if she determines they would cause a major adverse impact on the economy, public order, or the health, welfare or safety of the people of Hawaii.
www.foxnews.com /story/0,2933,166696,00.html   (973 words)

 CNN.com - White House rejects call for energy price controls - May 13, 2001
Bush and his aides have for weeks rejected the calls for price controls, saying they would only exacerbate the problem.
California has been plagued by intermittent rolling flouts this year, an energy crunch that seems to have been precipitated to a large extent by the state's move into deregulation of the electricity market.
But some lawmakers, even a few Republicans, have said temporary price controls are needed.
archives.cnn.com /2001/US/05/13/energy.policy   (789 words)

 CNN.com - Bush: Price controls won't solve energy crunch - June 18, 2001
The plan would seek to prevent severe price increases primarily during peak hours, while not threatening supplies by encouraging consumers to take steps voluntarily to reduce the amount of energy expended.
In April, the peak price was an average of $372 per kilowatt hour compared to $26 per kilowatt hour last year.
FERC has the ability to regulate when it deems the wholesale prices currently determined by the open market are not fair and reasonable.
archives.cnn.com /2001/US/06/18/energy/index.html   (521 words)

 Hoover Institution - Daily Report Archives - Price Controls on Gasoline? Bad Idea
What determines the price of gasoline is the amount producers are willing to supply at various prices and the amount drivers demand at various prices.
During the 1979 gasoline shortage, I calculated that the 80-cent-per-gallon price control caused consumers to spend about $1.10 a gallon (30 cents per gallon in lost time) and that if the price controls had been removed, the market-clearing price of gasoline would have been $1.00.
About 35 cents of the 50-cent-per-gallon increase in the price of gasoline, therefore, is due to world market conditions, one of which is the reduced oil production in Iraq.
www.hoover.org /pubaffairs/dailyreport/archive/2827286.html   (567 words)

 Elizabeth M. Whelan on Drug Price Controls on National Review Online
But most people do not know why there is a price gap, or they conclude that American companies are simply greedy and are jacking up the price here to take advantage of the relative affluence of our citizens, charging Americans far in excess of the "real" cost of the drug.
To comply with this treaty, drug companies slash prices for countries with price controls, which means most countries in the developed world.
Countries with price controls do not produce any significant supplies of new drugs — instead, the innovators have fled to the U.S., where they have the protection of the free-market system and protection for intellectual property they create.
www.nationalreview.com /comment/whelan200506160741.asp   (915 words)

 Cafe Hayek: More on Price Controls
To prevent the price of some staple good (say, lumber) from rising to its market level in the wake of a natural disaster is to camouflage the underlying reality.
If the price of lumber is currently below its market-clearing level, the quantity of lumber demanded at that price will exceed the quantity of lumber supplied at that price.
An inevitable consequence of price caps, therefore, is to raise the value of the skills and other assets useful in carrying out these other methods of rationing – skills at queuing; skills at successfully conducting fl-market exchanges; skills at manipulating personal and political connections.
cafehayek.typepad.com /hayek/2004/12/more_on_price_c.html   (994 words)

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