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<p>[QUOTE=&quot;Tejas, post: 8213373, member: 84905&quot;]<b>Price controls contain measured inflation in the short-term and cause more inflation in the long term.</b> </p><p><br /></p><p>By prohibiting price increases, measured inflation will not increase as it would in the absence of price controls. However, prices are signals of scarcity and contain incentives for production. </p><p>If prices are held artificially low, this reduces the incentive to produce more of the affected goods and services. All equal, less goods means higher prices. Hence, underlying inflationary pressure builds up and eventually breaks free once price controls are lifted. </p><p>This is a great problems of reform oriented governments that deregulate economies. The deregulation seems to create inflation, making the policy unpopular. In reality, the deregulation only reveals the inflation pressures that accumulated under the price control regime.[/QUOTE]</p><p><br /></p>

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