Price Control

Abstract

In modern times price control has been used to keep down food prices, as part of prices and incomes policies, in wartime economic management, to help governments win elections, and to tackle inflation. Along with macroeconomic restraint and specific commodity restraint by rationing, price controls used by the Allies in the Second World War succeeded in countering inflation. The ineffectiveness of price control in Latin America has helped give it a bad name. There are radically different forms of controls in greatly differing contexts; price control should be seen as a diversely applicable policy, sometimes advisable, sometimes not.

This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume