Obviously, the rate of inflation is just one factor, and in some cases it may not be the most significant one. In these situations, financial decisions and financial advisors become much more important than technical decisions and engineers and other individuals concerned with the technical side of production. It is, therefore, essential to keep inflation relatively low and prices flexible in order to facilitate the flow of resources to more productive uses. It follows that price controls must be phased out as soon as possible. Contractual obligations must be met in a market economy Though it is often discussed separately, the sanctity of contracts is, in a way, an aspect of the property rights issue when the latter is interpreted in a broad sense.
Contracts establish claims or rights over resources or actions.
Progress in market economies depends fundamentally on the growth of contracts and on the expectation that contracts are respected most of the time. When a supplier sells some of its output to others, it expects, in exchange, a payment reflecting the agreed price within the specified time indicated in the contract. When a utility company sells electricity, water or telephone services to other companies, it expects to be paid on time. When a bank lends money to individuals or ent erprises, it generally expects to get the money back, plus the agreed interest, at the specified time. In all these examples and many others, a major disregard of contractual obligations has characterised many of the economies in transition.