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Imported Inflation 1973-74 and the Accommodation Issue

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  • Phillip Cagan

Abstract

The purpose of the present study is to measure the amount of price increase that the proposals for accommodation required in 1973-74. Presumably such an estimate of the amount could be made in time to act on it. Whether accommodation is a desirable policy is not addressed here. Consistently followed, it would result in a higher long-run rate of inflation, because there are not likely to be nearly enough episodes of deflationary accommodation to offset the inflationary ones. Notwithstanding the appeal in the short run to accept inflationary fait accompli in order to avoid prolonged economic slack, one may have strong reservations about the long-run consequences on expectations of following such a policy.

Suggested Citation

  • Phillip Cagan, 1978. "Imported Inflation 1973-74 and the Accommodation Issue," NBER Working Papers 0258, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0258
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    References listed on IDEAS

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    1. Michael W. Keran & Michael Riordan, 1976. "Stabilization policy in world context," Economic Review, Federal Reserve Bank of San Francisco, issue Fall, pages 5-19.
    2. Hamburger, Michael J., 1977. "Behavior of the money stock : Is there a puzzle?," Journal of Monetary Economics, Elsevier, vol. 3(3), pages 265-288, July.
    3. Robert H. Rasche & John A. Tatom, 1977. "The effects of the new energy regime on economic capacity, production, and prices," Review, Federal Reserve Bank of St. Louis, vol. 59(May), pages 2-12.
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    Cited by:

    1. Aurélien Goutsmedt, 2021. "From the Stagflation to the Great Inflation: Explaining the US economy of the 1970s," Revue d'économie politique, Dalloz, vol. 131(3), pages 557-582.
    2. Arthur E. Gandolfi & James R. Lothian, 1983. "International Price Behavior and the Demand for Money," NBER Chapters, in: The International Transmission of Inflation, pages 421-461, National Bureau of Economic Research, Inc.

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