TY  - JOUR
AU  - Blinder,Alan S.
AU  - Newton,William J.
TI  - The 1971-1974 Controls Program and The Price Level: An Econometric Post-Mortem
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 279
PY  - 1981
Y2  - October 1981
UR  - http://www.nber.org/papers/w0279
L1  - http://www.nber.org/papers/w0279.pdf
N1  - Author contact info:
Alan S. Blinder
Department of Economics
Princeton University
Princeton, NJ 08544-1021
Tel: 609/258-3358
Fax: 609/258-5398
E-Mail: blinder@princeton.edu
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 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.
ER  -