The 1971-1974 Controls Program and The Price Level: An Econometric Post-Mortem / Alan S. Blinder, William J. Newton.

Format:

Book

Author/Creator:

Blinder, Alan S.

Contributor:

National Bureau of Economic Research.

Newton, William J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w0279.

NBER working paper series no. w0279

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The 1971-1974 Controls Program and The Price Level

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1981.

Summary:

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 treated 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 1974controls 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 of the burst of 'double digit' inflation in non-food and non-energy prices during 1974.

Notes:

Print version record

October 1981.