Campaign proposals could have unintended economic effects

UC economist tells ABC News that efforts to help Americans could lead to higher prices, scarcity

Government interventions that would attempt to help consumers could lead to other problems, a University of Cincinnati economist told ABC News.

Michael Jones, PhD
Assoc Professor
Academic Director, MAECON
LCB-Economics

Michael Jones, PhD, assistant professor of economics

Vice President Kamala Harris has unveiled the economic agenda for her presidential campaign, which includes a ban on grocery price gouging, a $25,000 subsidy for first-time homebuyers and child tax credits. To evaluate the proposals, ABC News turned to economists including Michael Jones, PhD, assistant professor of economics in the University of Cincinnati's Carl H. Lindner College of Business.

Jones said Harris’ strategy to deal with inflation through a price-gouging ban could lead to scarcity of goods.

"If there's a restriction on the prices that companies can charge for products, they simply won't supply them," he said.

A subsidy for homebuyers could cause sellers to boost their asking prices, negating any benefit for the buyers, Jones said.

"If they have $25,000 more to spend on a house, they'll submit bids up to $25,000 higher for the home," he said. "That policy in particular is a bad idea because it won't bring the price of housing down."

See more from ABC News.

Featured image at top: A woman shops for groceries with a motorized shopping cart. Photo/Amigo Mobility via Unsplash

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