This is Carola Binder’s very useful new book, essentially a very good economic history. Here is an excerpt:
The Nixon price controls were seen as necessary to support the third part of the economic stabilization program, an expansionary fiscal program including tax cuts to promote business recovery. The Council of Economic Advisers wrote in its annual report that “steps to make fiscal policy more expansionary have been limited by the need to avoid intensifying inflationary expectations and accelerating inflation.” The establishment of direct wage and price controls paved the way for broader measures, as it provided a degree of protection against the reality and expectation of inflation.”
Ties between the dollar and gold have also been severed recently, as Bretton Woods transitioned to floating exchange rates. Macro in the 1970s was a strange thing!
The book is recommended, you can pre-order heremost of American monetary history is covered.
