One thing is clear: people do not like to pay higher prices when they experience inflation. When the rate of inflation rises to a point that concerns voters, elected officials may be tempted to use price controls—measures that dictate the maximum price merchants can charge customers for goods. Can price ceilings stop inflation? The United States’ experience suggests not really.

As in the United States, the recent experiences in Zimbabwe and Venezuela as well as in Revolutionary France (the first hyperinflation ever recorded) suggest that attempts to prevent prices from rising above a ceiling during a hyperinflationary episode create shortages. Such shortages spur illegal black-market transactions, where prices can escalate much higher because they are not subjected to the price controls. Therefore, even in more dictatorial regimes, the evidence suggests that price controls do little to limit the rate of inflation.