Thoughts on business school, economics, NC State, and everyday life from an economist at NC State's business school
Monday, April 22, 2013
Free gas in Caracas
Gas in Venezuela costs less than six cents per gallon. This has helped maintain political support for the ruling party, but as a recent WSJ piece points out, has been ruinous for the economy. Every gallon of gas sold is a missed opportunity for government revenue; Venezuela's budget deficit represents 12% of GDP. Consuming gasoline at home rather than exporting it means that the country has shortages of goods such as milk and flour. Another example of the extortions resulting from price controls.
Steve Allen is Associate Dean for Graduate Programs and Research in the College of Management at NC State University. He has appointments in the Department of Economics as well as the Department of Management, Innovation, and Entrepreneurship. Steve also is a Research Associate of the National Bureau of Economic Research, a non-profit research organization located in Cambridge, Mass.