When prices that used to be regulated are no longer regulated, what do you call it? To liberalize prices? To deregulate?


1 Answer 1


Both are possible, perhaps with slightly different technical meanings.

"Price deregulation" is the removal of rules from prices. So if there is a rule which states that "The minimum price of an 800g loaf of bread is 75p", and that rule is repealed, that is price deregulation.

"Price liberalization" includes deregulation, but also includes the removal of distortionary taxes and other mechanisms to affect prices.

If there is a tax that says "White bread is taxed at 15% but brown bread is taxed at 5%" this will distort the prices that shops charge for white and brown bread. Removing or flattening this tax (so both are treated equally) is price liberalisation. There are other more subtle ways that governments can control prices without simple setting maximum and minimum prices, for example by enforcing standards or requiring inspection for some products (one cost for Scotch producers is the requirement to provide housing for the tax inspector to stay in at the site of the distillery) this also affects the price of Scotch. Border tariffs are another type of price control.

  • Which would you use if a price ceiling is removed? Commented Mar 21, 2021 at 20:01
  • That is a rule for prices so it is also deregulation and liberalization
    – James K
    Commented Mar 21, 2021 at 20:41
  • For a less technical word, the price could be "uncapped". Commented Mar 21, 2021 at 21:04

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