The Skeptical Liberal: 03/05/2006 - 03/12/2006

The Skeptical Liberal

How can we live together in peace, prosperity, and harmony, while retaining our liberties as autonomous individuals who can, and must, create our own values? -- J.M. Buchanan


Roofs or Ceilings? Stigler and Friedman on Price Controls

Spring Break! I must be on break because I have some time to blog.

Kevin Brancato over at the blog Truck and Barter recently made a classic exercise in the application of price theory available online. The essay was written in 1946 by George J. Stigler and Milton Friedman with the title Roofs or Ceilings?: The Current Housing Problem. Th article is classic "Chicago": simple price theory tools applied to a policy problem with the conclusion that direct government regulation of the price of housing leds to a number of outcomes which are far worse than those which the regulation was designed to fix. An early example of the "government failure" argument.

Roofs or Ceilings?: The Current Housing Problem, by Milton Friedman and George J. Stigler (Foundation for Economic Education, 1946).