Further Expansion and Less Inflation in 1972.

The article presents some economic updates. It discusses the New Economic Policy proposed by U.S. President Richard M. Nixon. The record of price-wage controls or incomes policies as advocated by the policy is not encouraging. The direct control approach has typically been attempted when economies were experiencing accelerating inflation, full employment, excess demands, and highly simulative monetary-fiscal policies. Hence, direct controls merely temporarily suppressed the symptoms of inflation until pressures became too intense and the approach was abandoned amid overt or tacit admission of political defeat. Although incomes policies continue to offer an apparent "easy way out," performance has inevitably been lacking. Another updates highlights that after recurring evidence of irreparable strain, the Bretton Woods international monetary system finally came apart at the seams. The fatal flaw in the system was the lack of a satisfactory adjustment mechanism which would enable countries to achieve equilibrium in their balance of payments once disequilibrium occurred. Varying rates of inflation, economic growth, and interest rates in major trading countries must be countered either by exchange rate adjustments or by domestic employment and price changes.