Management in 1962. In most developed countries, it was used in some form or another to counter

The problem of stagflation that emerged in the 1970s. Sometimes it was used in conjunction with

Price controls.

In the UK, some sort of incomes policy was in force almost the whole time between 1965 and

For the first few years it was legally enforced, but under the Labour government of 1974 to

Pay increases were limited by voluntary agreement of the unions. In the 1980s price and

Incomes controls were abandoned in favour of a free market approach.

Limiting wage increases is seen as a means of reducing the problem of inflation associated with

A given level of unemployment. The difficulty faced by those trying to implement incomes policy is

That it distorts the market for labour. Pressure for pay rises can also build up at the end of a period

Of controls, as the collapse of the pay policy of the late 1970s amid strikes and labour unrest testified.

The long-term effectiveness of limiting increases in the prices of goods in the shops is to be

Doubted. The problem with price freezes is that of empty shelves. Either producers reduce the

Stock of goods they sell or consumers buy up everything available as the prices of things no longer

Adequately ration the supply.

Vocabulary Notes to Text 5.7.1.5

In conjunction with... — в сочетании с...

To abandon — отменять