Sunday, August 1, 2010

Ramzan: The inflation magnet

It has been customary in Pakistan for the price of staples to skyrocket during Ramzan.  There is no obvious explanation for this. The demand of certain items is predictably high during Ramzan, and hence their shortage and subsequent price hikes makes no sense since prior information on the demand cycle is available.

What else could be the reason other than old, garden variety rent seeking, and in many instances hoarding, and price gouging.

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