The Bank of Russia called the optimal way to combat inflation. According to the analysts of the Central Bank, artificial restriction of rising prices works temporarily, and then can harm the economy. A more efficient means for stabilizing price increase is the targeted material assistance to the poor, indicated in the analytical note “Price regulation: when should I stop?”, Published on the website of the Central Bank.
Direct price adjustment in stores creates imbalances in commodity markets and can negatively affect the work of regulated industries and the economy as a whole. In addition, such a measure will not help avoid the growth of world prices in the long run. Cash payments of the least secured segments of the population are a much more sensible step from a social and economic point of view.
Price freezing agreements and export duties will reduce investments in the production and production of goods, prices for which are regulated, and subsequently will slow down the development of industries. Direct regulation also threatens the occurrence of the deficit and the expansion of the shadow economy – the costs of the state to combat it, respectively, will also increase. Moreover, with this state of affairs, price signals are distorted, which can only increase the influence of inflation of factors.