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While the US Federal Reserve considers moves to fight inflation, some politicians have attempted to take matters into their own hands. In May, Senator Elizabeth Warren (Democrat of Massachusetts) and a group of colleagues introduced a bill that would make it illegal to offer “a good or service at an unconscionably excessive price during an exceptional market shock” and would also oblige companies to disclose changes in prices to the Securities and Exchange Commission. Would those policies benefit the US economy? To explore these ideas, Chicago Booth’s Initiative on Global Markets asked its US Economic Experts Panel to weigh in.
Barry Eichengreen, University of California at Berkeley
“An existential threat to lives and livelihoods (circumstances akin to war): yes. An ‘exceptional market shock,’ though? What exactly qualifies?”
Response: Uncertain
Kenneth Judd, Stanford
“What is the definition of ‘unconscionable’? Laws must be far clearer and more precise than vague phrases that express moral sentiments.”
Response: Strongly disagree
Eric Maskin, Harvard
“At a time of shortage, high prices can serve to stimulate an increase in supply.”
Response: Disagree
Daron Acemoglu, MIT
“This would be useful info for investors and regulators. Not clear whether just an information provision is sufficient, but it’s a first step.”
Response: Agree
Pinelopi Goldberg, Yale
“It would introduce an incredible bureaucracy with no tangible benefits. Seems the first step toward price controls.”
Response: Disagree
Christopher Udry, Northwestern
“I expect this would be easy for firms to manipulate. Seems wasteful.”
Response: Disagree
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