Price controls against “greedflation”: lessons from the debate over incomes policy

Basile Clerc

No 2024-11, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: Why do some economists support price controls in the face of inflation during peacetime? Our thesis is that, in the history of economic thought, understanding the role of profits in inflationary dynamics is the crucial variable. To demonstrate this, we investigate the extensive literature on incomes policy, insofar as much of the thinking on macroeconomic price controls in peacetime is part of this literature. This corpus is crossed by a major schism: some advocate price and wage controls while others limit control to wages alone. We show that the defense of price controls is always based on the thesis that profits play an autonomous role in inflationary dynamics. Conversely, the advocates of an incomes policy reduced to wage controls see margins as mere transmission belts for excessive wage increases into prices. Price controls are thus rejected ex ante, even before any criticism of the consequences of their application.

Keywords: Price; controls; -; Wage; controls; -; Incomes; policy; -; Inflation; -; Unemployment (search for similar items in EconPapers)
JEL-codes: B22 E12 E64 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2024
New Economics Papers: this item is included in nep-his, nep-hpe, nep-mon and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://economix.fr/pdf/dt/2024/WP_EcoX_2024-11.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2024-11

Access Statistics for this paper

More papers in EconomiX Working Papers from University of Paris Nanterre, EconomiX Contact information at EDIRC.
Bibliographic data for series maintained by Valerie Mignon ( this e-mail address is bad, please contact ).