wage and price controls


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wage and price controls,

economic policy measure in which the government places a ceiling on wages and prices to curb inflation. Also known as incomes policy, such programs have generally been avoided in the United States during peacetime. Brief but strict wage and price controls were imposed during World War II and the Korean War, as well as more limited ones in the 1960s. America's most controversial peacetime experiment with an incomes policy was during the period 1971–74, when inflation was fueled by the costs of the Vietnam War, the 1973 oil embargo, and the later quadrupling in the world price of oil by the Organization of Petroleum Exporting Countries (OPEC). Wage and price controls during peacetime have yielded minor gains at best in the United States; in postwar Western Europe, incomes policies have been more frequently used. Britain, the Netherlands, Sweden, and Germany have all implemented controls at various times and France has experimented with wage and price controls many times since the 19th cent.
References in periodicals archive ?
Not only do wage and price controls fail to stop inflation, they make matters worse: The quality of available goods begins to decline; shortages develop; black markets appear; rationing is then often instituted.
Renounce any possibility of government imposing destructive wage and price controls.