The prices of products that replace price-stopped foods have increased drastically

By: Trademagazin Date: 2022. 12. 16. 14:58

Due to the wave of inflation that began in early 2021 and affected the entire world, the government felt it necessary to intervene in market processes, which then brought further inflation with it. Currently, the prices of products that replace government-priced food are increasing drastically, but inflation affects other areas as well.

The article by vg.hu mentions that the price cap is not a Hungarian invention, in the late 60s and early 70s, price caps were popularly used in the United States in the field of various products and services. Milton Friedman argued most loudly against price caps, claiming that price freezes lead to shortages and cannot keep inflation under control. Companies are creative, if they accumulate losses on one product, they restore their profitability by raising other, non-regulated prices. Time has vindicated him in this case. Inflation rose gradually after 1972 and in 1974, when some of the measures were still in place, was 11.1 percent, an extraordinary increase in the United States over the previous decade.