The world is a daily classroom on basic economics principles: from the Greece bailout, to the austerity measures in several EU countries, to debate over the Chinese yuan currency, to the American recession and Occupy Wall Street protests.
Economists on both ends of the political and economic spectra argue vociferously as to why their philosophies make the most sense, only to have history weigh in with confounding factors – pesky details like accounting fraud, war, disease, technology developments, and demographic changes.
A common US case study: how the US emerged from the Great Depression in the 1930s. Was it because of President Roosevelt’s New Deal policies or the socio-economic shifts in industry required by the start of World War II? The debate rages on. What I see, with each discussion, is that the more you try to control an economic system, the more it will contort itself to go where it wants, much like squeezing a water balloon.
Adam Barak, Director of PharmaPrice International (PPi Ltd) provides an amusing yet insightful explanation of pharmaceutical pricing policy in Europe, and how it relates to the prices of other common goods, such as cars…and football viewing. As individual European governments continue to struggle with EU laws, the water balloon will continue to contort.
