Professor Modigliani on price controls: the baleful influence of the perfectly competitive model

Abstract

Professor Modigliani argues that, owing to considerations derived from the model of perfect competition, price controls in general enhance economic welfare and that this applies in particular to health care. Maintains the diametric opposite on both counts: that the perfectly competitive model is logically flawed and therefore cannot be applied to the real world of health care, and that price controls, there or anywhere else, have negative repercussions on economic welfare. Further, that the economics profession is well advised to reject the perfectly competitive model, and instead embrace one of rivalistic competition.

Citation

Block, W. (1995), "Professor Modigliani on price controls: the baleful influence of the perfectly competitive model", International Journal of Social Economics, Vol. 22 No. 5, pp. 27-30. https://doi.org/10.1108/03068299510087912