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The Eastern European country of Belarus has taken drastic steps to curb runaway inflation by banning consumer-facing businesses from raising prices.
The price controls were announced on October 6 by Belarusian President Alexander Lukashenko. quoted by state media He said he was imposing a ban on consumer price increases in response to “exorbitant” inflation.
“From October 6, any price increases are prohibited. Prohibited!” State news agency Belta quoted Lukashenko as saying at a government ministerial meeting.
The price cap is “from today.
Inflation in the Eastern European country, which is closely allied with Russia and has been hit by Western sanctions over the Ukraine conflict, is expected to hit 19% through 2022, according to Belarusian state media.
Prices “hit the ceiling”
Inna Medvedeva, Chairman of the Belarusian National Statistics Commission, said: Quoted by Bertha Inflation reached 13.8% annualized in August, citing price pressures as rising.
“The challenge is to bring inflation back to 7-8% by next year,” Belarus’ leader was quoted as saying by AFP.
Mr. Lukashenko complained that price increases were “at the limit”, adding that the price cap could be eased in rare exceptions allowed by the authorities.
Lukashenko said “immediate detention and criminal prosecution” awaited those who ignored the new price-raising ban, and vowed to punish companies that try to close or exit the market.
Berta said Belarusian Prime Minister Roman Golovchenko is against price controls.
“In Belarus, price regulation is the strictest in the CIS. [Commonwealth of Independent States] Golovchenko argued that over-regulation could be “counterproductive.”
Price Controls ‘Analytically Shattered’
Rapid inflation in the United States has rekindled interest in the idea of price controls that was used during the inflationary period of the 1970s. The experiment was widely considered a failure, but the current inflation has rekindled the debate on the topic.
The Roosevelt Institute, a liberal think tank ran an editorial Last November, he called the latest inflation headlines an opportunity to reconsider price controls, essentially arguing to consider them as one of the “broader” tools for dealing with price pressures. Did. A rate hike by the Federal Reserve is not the solution.
Conservative think tank Hoover Institute announces editorial In January 2022, it will back the return of price controls and warn that such measures will cause shortages, produce inferior products, lead to unfair outcomes, and are generally “analytically crushed.” Did.
“Price controls create shortages, waste people’s time in line, sometimes lead to supplier favors, and, as was the case with oil and gasoline in the 1970s, create harmful effects that last for decades. It could lead to regulation,” writes Professor David Henderson. PhD in Economics and Research Fellow at the Hoover Institution.
A recent study by a team of economists, including the Federal Reserve, found that the current inflationary spell plaguing American households is largely caused by a surge in demand from stimulus, with inflation rising to 60%. %.
Supply-side bottlenecks also played a significant role in exacerbating the problem.
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Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he’s ever heard comes from Roy his Peter Clark.
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