Friday 24 April 2009

More excellent research from Rantin' Rab

His example illustrates The Golden Rule* that subsidies do not make things cheaper, they make them more expensive.

Working out who gains from the subsidy is usually easy; the interesting bit is identifying who ends up paying for it and who ends up paying the higher price.

* Of course there are exceptions to this, but it's a good working assumption.

1 comments:

RantinRab said...

The more you dig, the further your jaw drops! Ta for the link.