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Are we returning to the price controls of the 1970s?

Graham Watson

1st June 2023

Larry Elliott writing in the Guardian seeks to draw out both the similarities and the differences between the price controls of the Heath government in the 1970s, and the attempt by the Sunak government to encourage supermarkets to reach a voluntary agreement to do the same in the present climate.

Of course, a voluntary rather than statutory cap is clearly very different but many of the same problems still remain, not least the distortionary effect on the allocation of resources and the associated welfare loss.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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