The Effectiveness of Phase II Price Controls

Phase II of the Economic Stabilization Program lasted from November 1971, when it replaced the initial freeze, until January 1973, when the less stringent controls of Phase III were initiated. It is widely thought that controls during Phase II succeeded in holding down wages and prices. The alleged success of Phase II controls and the rapid price rises during Phase III led to frequent demands for a return to the “good old days” of Phase II. The apparent success of Phase II controls contrasted with the failure of most past price control programs.