Management Sciences and Quantitative Methods Commons^™

How Effective Are Price Regulator’S Price Control Measures?, Biman Prasad, Prof. Paresh K. Narayan, Joel Abraham

Bulletin of Monetary Economics and Banking

The Fijian Competition and Consumer Commission (FCCC) is Fiji’s price regulatory. If price control measures are effective, they should not contribute to inflation. This note tests the effectiveness of FCCC’s price controlling role by proposing that it does not lead to inflation. Using time-series regression models, we establish the effect of FCCC’s regulatory effectiveness and show that it contributes to a reduction in prices at least five months after regulated prices come into force. We find that inflation declines by 0.5% or 26% of the sample annualized inflation (which is 1.93%).