TY - JOUR
T1 - The 1971-1974 controls program and the price level. An econometric post-mortem
AU - Blinder, Alan S.
AU - Newton, William J.
N1 - Funding Information:
‘The research tcported here is part of the National Bureau of Ecor* enic Research’s program in liconomic Fluctuations. Any opinione expressed are those of the authtirs and no+ those of the N dER, Research support from the National Science Foundation is gratefully acknowledged, as a e helpful comments from Robert J. Gordon, Martin Feldstein, and a referee.
PY - 1981
Y1 - 1981
N2 - 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.
AB - 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.
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U2 - 10.1016/0304-3932(81)90002-7
DO - 10.1016/0304-3932(81)90002-7
M3 - Article
AN - SCOPUS:49149136276
SN - 0304-3932
VL - 8
SP - 1
EP - 23
JO - Carnegie-Rochester Confer. Series on Public Policy
JF - Carnegie-Rochester Confer. Series on Public Policy
IS - 1
ER -