Announcement is very recent. I initially was going to post this as a text post as the only source I could find was Belta. Belta is Belarus' state media (more info). This is "straight from the...
Announcement is very recent. I initially was going to post this as a text post as the only source I could find was Belta. Belta is Belarus' state media (more info). This is "straight from the horse's mouth", but they're still propagandists.
There's another reason I'm posting this: I'M SUPER CURIOUS what's going to happen here. This has been tried before in the context of hyperinflation, and obviously it's a stupid idea. But it's not obvious to me why it wouldn't work in the context of small scale inflation, especially if the measure is temporary.
If price freezes can stave off hyperinflation for a period of weeks or even months, what happens when the inflation is somewhat mild?
Anything relying on imports will be affected and it will become less and less affordable for businesses to sell those. But that can be offset by government measures as well (similarly to how some EU governments are paying their citizens' gas bills right now). Over time of course the delta becomes too much and if black markets get involved, then governments lose out on the tax revenue etc making everything worse. BUT IN THEORY…?!
Anyway, yes, theory. My suspicion is that prices will subtly increase anyway, because Belarus doesn't sound organized enough to have a reliable way to enforce this. And if this happens, it would work like a release valve… which actually would be a good thing?
I don't envy having to deal with this clown, but damn am I curious to see the results of this experiment. I don't think the outcome is as clear as the knee-jerk reaction demands it to be.
Actually, yes. The entire global monetary system was an experiment in such artificial price control as USD was tied to gold standard. It was only after the Bretton Woods system collapsed (in 1975,...
Actually, yes. The entire global monetary system was an experiment in such artificial price control as USD was tied to gold standard. It was only after the Bretton Woods system collapsed (in 1975, Nixon's time probably) that currencies were freely traded on the exchanges. But then again, the new system (some experts say) is an even more dangerous experiment than before as there is no backing except a word or promise!
Announcement is very recent. I initially was going to post this as a text post as the only source I could find was Belta. Belta is Belarus' state media (more info). This is "straight from the horse's mouth", but they're still propagandists.
Original source (in Russian), or in English: "officially" translated by Google Translate.
There's another reason I'm posting this: I'M SUPER CURIOUS what's going to happen here. This has been tried before in the context of hyperinflation, and obviously it's a stupid idea. But it's not obvious to me why it wouldn't work in the context of small scale inflation, especially if the measure is temporary.
If price freezes can stave off hyperinflation for a period of weeks or even months, what happens when the inflation is somewhat mild?
Anything relying on imports will be affected and it will become less and less affordable for businesses to sell those. But that can be offset by government measures as well (similarly to how some EU governments are paying their citizens' gas bills right now). Over time of course the delta becomes too much and if black markets get involved, then governments lose out on the tax revenue etc making everything worse. BUT IN THEORY…?!
Anyway, yes, theory. My suspicion is that prices will subtly increase anyway, because Belarus doesn't sound organized enough to have a reliable way to enforce this. And if this happens, it would work like a release valve… which actually would be a good thing?
I don't envy having to deal with this clown, but damn am I curious to see the results of this experiment. I don't think the outcome is as clear as the knee-jerk reaction demands it to be.
Known - yes. Actually ran the experiment? I don’t believe so!
Economics is like science except you can’t run most of the interesting experiments.
Actually, yes. The entire global monetary system was an experiment in such artificial price control as USD was tied to gold standard. It was only after the Bretton Woods system collapsed (in 1975, Nixon's time probably) that currencies were freely traded on the exchanges. But then again, the new system (some experts say) is an even more dangerous experiment than before as there is no backing except a word or promise!
I’m not really convinced the two situations compare. Either way, we will see. I don’t envy Belarusians.