When Kamala Harris was asked on Wednesday what she would do to assist an undecided voter worried about the worth of groceries, she said she would introduce a national ban on worth gouging.

Her schedule, she told an spectators in Pennsylvania, would “stop companies taking advantage of the desperation and require of the American customer and jacking up prices without any consequences”.

The proposed ban – one of her key economic policies – would apply during “times of crisis”.

But would it really bring down prices for consumers? And could it even prove potentially counterproductive?

Rising prices have been a key concern for Americans in recent years and polls recommend a majority of Americans feel worse off than they did four years ago.

In April 2024, the distribute of Americans naming the high expense of living as the most significant monetary issue facing their household reached 41%, the highest since 2005.

Overall worth rise peaked at 9.1% in the year to June 2022, rates not seen in four decades.

And food worth rise peaked even higher, reaching 11.4% in the year to August 2022.

Both are now back below 3%, though average US food prices are still around 27% higher than at the complete of 2019.

worth rise has been a global issue, but some economists debate that the economic stimulus policies of the Biden-Harris administration contributed to this spike in US prices, making worth rise an issue on which she is keen to reassure voters.

There have also been claims that some corporate retailers took the coronavirus pandemic in 2020 – when supply chains were disrupted and people’s lives and shopping habits severely impacted by lockdowns – as an chance to boost their prices and gain margins.

This phenomenon has been dubbed by some as “greedflation” and forms the economic justification for Harris’s worth gouging ban.

Donald Trump has compared her schedule to “communist worth control” and “like something straight out of Venezuela or the Soviet Union.”

The Harris throng has said the federal ban would apply to “essential goods during emergencies or times of crisis”.

Thirty-seven US states already have laws which prohibit worth gouging in the wake of local states of emergency, which can pursue extreme weather events such as hurricanes or disasters such as wildfires.

They were also triggered in dozens of US states during the coronavirus pandemic.

We do not recognize how Harris’s nationwide controls would work, but when she was a senator in 2020, she co-sponsored legislation that would have defined worth gouging in an emergency as charging more than 10% above the previous average worth for an item.

It is assumed that Harris’s federal ban on worth gouging would be like a nationwide version of the various state-level regimes.

On CNN, she was asked how her schedule would assist bring down grocery prices in general, given it would only apply during emergencies.

She did not respond directly, instead talking about companies “taking advantage of people” during the recent hurricanes and in the pandemic.

The argument over how much the overall spike in US prices in recent years can be attributed to worth gouging is contested among economists.

Isabella Weber, an associate professor of economics at the University of Massachusetts, Amherst, has argued that there is compelling evidence of what she calls “seller’s worth rise” in the US since 2020.

She cites the truth that total US corporate profits measured as a distribute of the overall US economy jumped between 2020 and 2022 – and, as an example, points to the case of the giant US meat processor, Tyson, which doubled its gain margins in the second half of 2021.

Tyson attributed the higher margins to increases in its productivity.

Weber wrote in August that “Harris is correct about going after worth gouging”.

However, many other economists debate that although there might be person examples of such corporate behaviour, by far the largest driver of rising worth rise since 2020 has been a straightforward shortage of goods relative to demand.

“worth gouging played little role in the US worth rise issues over the history several years,” argues the consultancy Oxford Economics.

Moreover, economists are generally wary of government interference in prices set by businesses, even in times of crisis.

A ordinary example used by critics is the case of a severe snowstorm in which local demand for recent shovels shoots up and a local retailer increases prices in response.

The logic is that while such worth hikes might seem unfair – and polling shows they are extremely unpopular – the higher prices induce other retailers to order more snow shovels from suppliers. This increases the supply and brings the worth down again naturally, while ensuring as many people as feasible get access to the shovels they require.

A study from 2007 suggested that if a federal worth gouging law had been in place on gasoline sales after hurricanes Katrina and Rita in 2005, the economic damage would have been greater because of the discouragement for producers to boost their supply. The authors estimated that the overall economic damage would have increased by $1.5-3bn.

Economists generally prefer governments to focus their efforts to tackle worth gouging, to the extent that it exists, through breaking up corporate monopolies and oligopolies (tiny groups of dominant sellers in a given economy) and creating more free economy competition, rather than directly controlling prices.

“worth gouging’s not the correct way to ponder about it but worth competition is and anything the government can do to facilitate that competition [I’m] all for it”, says Mark Zandi, the chief economist of Moody’s Analytics.

In 2012 a panel of eminent economists were asked whether they agreed that the US state of Connecticut was correct to try to ban worth gouging during severe weather events. Only 8% agreed.

And there are numerous examples from history where attempts by governments to control prices have backfired, resulting in shortages or worth rise over the longer term.

The Soviet Union used worth controls and the outcome was long queues in shops. The former president of Venezuela, Hugo Chavez, imposed worth controls for food in 2003, contributing to chronic shortages and a huge rise in the undernourishment of the Venezuelan people.

However, it is a stretch to interpret Harris’ proposals, as laid out by her throng, as a general lurch into a regime of worth controls given the worth gouging law would likely be limited to times of crisis and limited to food and groceries.

Another proposal from the Harris throng is to lower prescription drug costs including by extending a “cap” on insulin drug prices to all Americans.

Insulin was capped at $35 (£27) a month for patients on Medicare – a federal insurance programme primarily designed to serve people aged 65 and over.

This is not a typical state worth control, where the economic expense is borne by the retailer. Rather, the federal government, which runs the Medicare structure, is responsible for reimbursing drug manufacturers for the difference between the $35 maximum worth and the retail expense of the insulin.

However, applying the cap to all Americans would cruel imposing the worth restriction on private US health insurers, not just the community Medicare structure. Unless pharmaceutical companies reduced their prices, this would cruel those private insurance companies would require to cover the difference.

And some economists alert they might have to raise their premiums for everyone in the scheme as a outcome – so while sure drug prices would be lower, overall healthcare costs would be unchanged.

The same logic applies for Kamala Harris’ proposal to extend a $2,000 total annual cap on out-of-pocket costs for prescription drugs on Medicare to all Americans, including those in private health insurance schemes.

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