One train of thought in the early to mid-1970s was that temporary wage and price controls could alleviate the negative impact on unemployment by ensuring that, over a period of time, wage- and price-setting behaviour would become consistent with the more restrictive macroeconomic policies. The Anti-Inflation Board was therefore established to try to anchor inflation expectations through wage and price controls.
The objective was to ensure that wage growth was in line with a set of targets for inflation of 8, 6, and 4 per cent over a 3-year period. This was done with the assumption that monetary and fiscal policy would be set to be consistent with such a result.5 The imposition of wage and price controls was very controversial, to say the least.