The Political Economy of Wage and Price Controls: Evidence from the Nixon Tapes

Burton Abrams and James Butkiewicz

No 07-10, Working Papers from University of Delaware, Department of Economics

Abstract: On August 15, 1971, Richard Nixon imposed the first and only peacetime wage and price controls in U.S. history. The Nixon tapes, personal tape recordings made during the presidency of Richard Nixon, are now available to the public and provide a unique body of evidence to investigate the motivations for Nixon’s macroeconomic policies. We have uncovered and report in this paper evidence that Nixon manipulated both monetary and fiscal policies to create a political business cycle that helped secure his reelection victory in 1972. Nixon was very knowledgeable about economic matters and understood the risks to the economy of his macroeconomic policy actions and the imposition of wage and price controls, but chose to tradeoff longer-term economic costs to the economy for his own short-term political gain.

Keywords: Wage and Price Controls; Political Business Cycle; Macroeconomic Policy (search for similar items in EconPapers)
JEL-codes: E3 E58 E6 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2007-10
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Related works:
Journal Article: The political economy of wage and price controls: evidence from the Nixon tapes (2017)
Working Paper: The political economy of wage and price controls: evidence from the Nixon tapes (2016)
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