AN IMPORTANT ASPECT of the recent high rates of inflation in both the United States and other countries has been the sharp increases in prices of raw commodities. To be sure, prices of primary industrial products usually have risen significantly during cyclical upswings, particularly during the phase when output is accelerating. Prices of raw agricultural commodities are also responsive to demand to some degree, although their most striking movements are usually induced by changes in supply. That the recent advance in raw commodity prices was one of the largest experienced in the United States is generally attributed to two factors: (1) the coincidence of the general business expansion in the United States with a reduction in the supply of some major agricultural products; and (2) the coincidence of the acceleration in general business expansions in the United States and other countries. The purpose of this paper is to explore the impact of this worldwide surge in the prices of raw commodities on the price level in the United States in 1973.1 The analysis uses an econometric model of price behavior by stage of process.