The 1971-1974 controls program and the price level. An econometric post-mortem

Alan S. Blinder, William J. Newton

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14 Scopus citations


This paper provides new empirical evidence on the effects of the Nixon wage-price controls on the price level. The major new wrinkle is that the controls are created as a quantitative (rather than just a qualitative) phenomenon through the use of a specially-constructed series indicating the fraction of the economy that was controlled. According to the estimates, by February 1974 controls had lowered the non-food non-energy price level by 3-4 percent. After that point, and especially after controls ended in April 1974, a period of rapid 'catch up' inflation eroded the gains that had been achieved, leaving the price level from zero to 2 percent below what it would have been in the absence of controls. The dismantling of controls can thus account for most the burst of 'double digit' inflation in non-food and non-energy prices during 1974.

Original languageEnglish (US)
Pages (from-to)1-23
Number of pages23
JournalJournal of Monetary Economics
Issue number1
StatePublished - 1981

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


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