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September 05, 2005
Price gouging?
If you cap the price (as some people are making noises about), rationing will take the form of queuing: people will have to wait in long lines for gasoline. This sounds just fine to some activists and academics, apparently ones with a lot of time on their hands. The rest of us, who do not think it would be fun to live in the Soviet Union, recognize that, painful as it may be, prices are in general a better way to allocate scarce resources than lines.
"In praise of price gouging," by Jane Galt, Asymmetrical Information, September 1, 2005
With the whole country bemoaning the rise in the average price of gas, a far more economically surprising change has been almost overlooked: The massive rise in the variance of the price of gas. Before the hurricane, the spread between the highest and lowest price of gas in Northern Virginia was about 10 cents. Now a half hour drive to Manassas revealed a four-fold increase in the spread, with prices ranging from $2.99 to $3.39.
"Gas Price Variance Up!" by Bryan Caplan, EconLog, September 5, 2005
Note to politicians of the world: For the last time, if you want supplies to flow to disaster areas, let prices rise!
"Bush's Hate Speech," by Bryan Caplan, EconLog, September 1, 2005
Posted at September 5, 2005 10:21 PM | Categories: Economics
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