Business: How Jawboning Has Worked In Canada

In Canada. Prime Minister Pierre Trudeau has tried to roll back a 5% rate of inflation by using the classic economic restraints of tight money and budget surpluses. He has also practiced a sophisticated form of jawboning, and his experience may hold some lessons for the U.S.

Last summer the Trudeau-appointed Prices and Incomes Commission sounded out leaders from business and labor on a proposed 5% ceiling for wage increases and 2.5% on prices. Labor leaders rejected the idea, largely because it provided no limit on rents or dividends.

Undaunted, the commission convened a meeting...

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