Homelander Posted May 12 Posted May 12 On 10/21/2014 at 12:22 PM, B-Man said: People who believe in government-set price controls — whether on interest rates charged for loans, rents charged for housing, or wages paid under minimum-wage laws — seem to think that this is the end of the story. Yet there is a vast literature on the economic repercussions of price controls. Whole books have been written just on the repercussions of rent-control laws in countries around the world. These repercussions include the housing shortages that almost invariably follow, the deterioration of existing housing, and the shift of economic resources — both construction materials and construction labor — from building ordinary housing for the general public to building luxury housing that only the affluent and the rich can afford, because that kind of housing is usually exempted from rent control. There is at least an equally vast literature on the repercussions of minimum-wage laws. Unemployment rates over 20 percent for younger, less-skilled, and less-experienced workers have been common, even in normal times — with much higher unemployment rates than that during recessions. Against this background of negative repercussions from various forms of price control, in countries around the world, why would anybody imagine that price controls on interest rates would not have repercussions that need to be considered?
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