You Know What’s Great About Price Controls? Oh Wait, Nothing

3 Sep

Zimbabwe is experiencing shortages of basic necessities and empty store shelves thanks to Mugabe’s decision to be the country with the world’s silliest economic policy. It’s simple really–just follow Greg Mankiw’s three easy steps:

Print a lot of money, control prices and wages, then watch the laws of economics take over.

Brad DeLong, Megan McArdle, and Hilzoy also comment on the “disaster-that-an-undergraduate-economics-major-could- avert”.

In related news, The Economist reports on the economic innovations of Venezuela:

Inflation in Venezuela increased by 1.1% in August as the government continued its spending programmes. Further, due to economic mismanagement, consumers are facing shortages of meat, flour and cooking oil despite windfall oil revenues. And big oil is feeling Chavez’s pinch as well, Exxon Mobil and ConocoPhillips are withdrawing after having to cede control of joint ventures.The bolivar, has fallen by 30% this year to 4,850 per dollar on the black market where the currency trades freely. The official rate, set in 2005, is 2,150.

First country to have its citizens carting wheelbarrows full of useless currency to the store wins.

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