in the early 1970s, a significant slice of the economy was subject to some form of
government price and/or entry regulation. The affected industries included (a) airlines,
(b) trucking, (c) railroads, (d) electric power, (e) natural gas production, (f) pipeline
transportation and distribution of natural gas, (g) crude oil and refined petroleum
products, (h) cable television, (i) automobile insurance, (j) hospital services, and others.
The share of these industries in GDP, while substantial, understates their potential impact
on overall economic performance of the economy since they generally supplied important
intermediate goods and services to downstream commercial and industrial users.
Beginning about 25 years ago legislative and regulatory actions began a process
of deregulation, vertical and horizontal industry restructuring and regulatory reform that
has now affected, to varying degrees, all of these industries. Many of these industries
have been completely transformed during this period of time (e.g. airlines, trucking, and
telecommunications). Others are in the midst of more lengthy transitions that involve
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restructuring and deregulation of major industry segments and the application of new
regulatory mechanisms to those segments that continue to be regulated (e.g. electricity).


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