The CPI for March was released yesterday. Malaysia’s consumer price index grew by approximately 1.6% from a year ago. It is slightly higher than the inflation rate recorded in February, which was at about 1.5% from a year ago. You can see which components contributed to the higher inflation, as well as the price behavior […]

In the news recently, the state of Johor plans to raise the floor price at which foreigners are allowed to purchase a house. The floor is now set at half a million ringgit. The proposed new floor is RM1 million (The news report in The Star wrote ceiling but if you know your microeconomics, you […]

A price-control mechanism has its economic cost, on top of that associated with the current subsidy regime in place in Malaysia. There are also some political costs to the control. In tight times when commodities are becoming dearer, any government that dares to reset retail prices upwards invites public wrath. There was talk of an early […]

Subsidy reduction will allow market forces to allocate resources more efficiently. Prime Minister Najib Razak was reported saying so recently to justify his administration’s commitment to subsidy reduction in the long run. By doing so, the Najib administration claims to be an advocate of free market. A claim that is not necessarily true, however. At best, that […]

It begins with a good intention. Everybody deserves to consume fantastical juice. After all, everything is made out of it. It would be a grave injustice to limit its consumption only to those who can afford it. Invested with executive power, a group of individuals with only the interest of the public at heart intends […]

Prices of the same tradable items in different places tend to converge in a perfectly efficient market. Theoretically, motivated by profits, individuals and entities act as arbitrageurs. They will continue to arbitrage until there are no more profits to be made. That is when prices equalized and that is the essence of the law of […]

On December 7 in the Parliament, based on the Hansard, Deputy Minister for International Trade and Industry Jacob Dungau Sagan was asked whether the government intends to abolish a policy that grants exclusive permits for imports to limited entities and effectively, the granting of monopoly power to several companies over certain commodities such as sugar […]

Ask a layperson what he or she thinks of the definition of economics. If they do not say it is the art of making money, many of them will mention that it is a study of supply and demand. In truth, economics is larger than either popular but otherwise misleading definitions. More accurately, it is […]

Not all dilemmas are really dilemmas. Open up the lid and upon closer inspection, the dilemma unravels without much investment in effort. One such apparent dilemma concerns the production of food and biofuel. There is really no dilemma between food and fuel however. Free price is the scissor to cut the fake Gordian knot. In […]

I praised Shahrir Samad earlier but I am having a second thought now. Shortly after that announcement, he suggested for food production to be subsidized, much to my dismay.[1] Pragmatic may be but our current government policies are confusing. If there is a liberalization in our economy, the current trend does not seem to suggest […]

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