NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The 1971-1974 Controls Program and The Price Level: An Econometric Post-Mortem

Alan S. Blinder, William J. Newton

NBER Working Paper No. 279 (Also Reprint No. r0210)
Issued in October 1981
NBER Program(s):   EFG

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.

download in pdf format
   (230 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w0279

Published: Blinder, Alan S. and Newton, William J. "The 1971-1974 Controls Program andthe Price Level: An Econometric Post-Mortem." Journal of Monetary Economics, Vol. 8, No. 1, (July 1981), pp. 1-23. citation courtesy of

Users who downloaded this paper also downloaded these:
DeLong America's Peacetime Inflation: The 1970s
Poole Macroeconomic Policy, 1971-75: An Appraisal
Helpman w2434 Macroeconomic Effects of Price Controls: The Role of Market Structure
Abe Fringe Benefit Provision for Female Part-Time Workers in Japan
Dornbusch and Edwards w2986 Macroeconomic Populism in Latin America
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us