Venezuela's Problematic New Price Controls

Venezuela will form a new agency over the course of the next three months that will database and regulate prices throughout the Venezuelan economy. The agency's goal is to bring inflation under control without having to adjust monetary or fiscal policies. Although the exact method of implementation has not yet been decided upon, the likely effect of the changes will be to further distort the economy, destabilize the goods and services sectors, incentivize the growth of the black market and create greater opportunities for corruption and possibly enable the government to nationalize additional businesses.