As the rate of transmission of COVID-19 lessens and workers return to jobs, demand for numerous goods and services is rising far above where it was in the policy-induced frozen economy. However, due to just-in-time production methods and trade imbalances—for example, countries like China exporting far more to the US than vice versa—everything from shipping containers to computer chips is located in the “wrong” place.
In an uncontrolled market, sellers of these scarce products can “pick their price,” leading to shortages and further price hikes in sectors such as used cars. Selective price controls on these products could be a way to guard against price gouging by producers of goods and help consumers.