Welcome

The Council on Wage and Price Stability, or COWPS, was an organization created within the Executive Office of the President on August 24, 1974 by the Council on Wage and Price Stability Act (P.L. 93- 387) to monitor and analyze inflationary developments in the economy.1 More specifically, the Council’s legislation enabled it to “intervene and otherwise participate on its own behalf in rule-making, rate-making, licensing, and other proceedings before any of the departments and agencies of the United States, in order to present its views as to the inflationary impact that might result from the possible outcomes of such proceedings.”  In the words of President Ford:

“This new Council on Wage and Price Stability will provide us with one means of identifying and exposing some of the causes of inflation. It will bring into sharper focus the critical developments of industrial performance, wage and productivity performance, and the effect on inflation of actions taken by the Federal Government.  I must reemphasize that the Council should not be a steppingstone back to mandatory wage and price controls. We have learned from experience that in today’s economy, controls lead to disruptions and new troubles…”2

 

The Council’s responsibility to identify and analyze inflationary influences in the economy extended to both the private and the public sectors.  The Council adopted the alternative view that the major policy instruments determining the rate of inflation are fiscal and monetary policy instead of conventional price indices like the CPI, meaning that any policy action that increased the aggregate supply of goods and services would lower the rate of inflation and vice versa.  This meant that a government regulation that generated benefits greater than costs was in a real sense anti – inflationary and a regulatory initiative generating costs in excess of benefits was inflationary.  On the other hand, COWPS labeled a regulatory initiative generating costs in excess of benefits as inflationary.3

This website contains documents that are taken directly from the work of economists on the council’s staff.  The topics presented are almost as diverse as the contents of the Federal Register.   The product of this staff of economists took several forms.  In most cases the council’s views were expressed through official written comments or “filings,” which became a part of the formal record in regulatory proceeding.  At other times, the views of the staff were expressed in public testimony at the agency.  In still other instances, detailed analyses were provided to agencies as a part of an “internal review” procedure.  And in yet other cases, the staff initiated studies of significant regulatory issues not related to any official regulatory proceeding.  In many instances, proposed Inflationary Impact Statements accompanied proposed regulations and these were often relied upon by the council’s staff in developing its analysis of the potential inflationary impact of the regulatory proposal.


1 180101, in COWPS Binder No. 18

2 John T. Woolley and Gerhard Peters, “The American Presidency Project.” Gerald Ford, “33- Statement on the Council on Wage and Price Stability Act,” (August 24, 1974), available at: http://www.presidency.ucsb.edu/ws/index.php?pid=4665

3James C. Miller III and Bruce Yandle, Eds, Benefit- Cost Analyses of Social Regulation: Case Studies from the Council on Wage and Price Stability, (Washington, D.C.: American Enterprise Institute for Public Policy Research, 1979)

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