This is the Cato Daily Podcast for Tuesday, September 15th, 2020.

I'm Caleb Brown.

The global pandemic caused dramatic shifts in employment, demand for goods and services, and a massive

reduction in economic activity. In a new report from the Cato Institute,

Pandemics and Policy, Ryan Bourne contributes an essay on the price and wage controls imposed at the state and local level

and their predictable results.

What have been the economic impacts thus far in this pandemic of various state and level, state and local attempts to

control wages or prices.

Well I think it's obvious to everyone that the pandemic has been profoundly disruptive both to the

demand side and the supply side of both products and labour markets. If you think about the demand

side we saw the huge collapse in industries which require people to be

socializing or close to each other in close physical proximity. We saw soaring

demand for health products for certain types of groceries that people use at home

and a big switch from commercial to retail versions of products.

On the supply side we saw huge regulations imposed on certain industries

disruption because of the health effects and things like meat packing. So combine these things and there are good reasons to expect

you to see pretty big price variation compared to what we had in in so-called normal times.

So what my chapter has sought to do here is try to walk through the economics of what we'd expect to happen if you impose price and wage controls in that environment where the supply and demand

conditions are changing dramatically.

And I think the key consequences are twofold.

I think the first consequence is that as a result of the

contraction in supply or expansion in demand for a whole range of products, the

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