Price controls

Price controls are governmental restrictions on the prices that can be charged for goods and services in a market. The most common are prohibitions to charge more than X for goods or services (maximum price) or the prohibition on paying less than Y (minimum price). A less common restriction is to impose an exact price for a certain good, making it illegal to charge more or less than the official rate.

Price controls are an example of central planning or authoritarian control of the economy.

Examples

Common examples of price controls include minimum wage laws, fixed exchange rates, centrally mandated interest rates, etc.

History

Price controls have been documented since the Code of Hammurabi in 1754 BC. Roman Emperor Diocletian also issued an Edict on Maximum Prices in 301 AD. The Law of the Maximum passed in France in 1793 AD during the French Revolution is also a well known example.