Federal Reserve Chairman Ben Bernanke said yesterday that he doesn't believe the United States will experience the out-of-control prices seen with 1970s oil shocks.

His assessment came in a speech to graduating students at Harvard University, where he earned a bachelor's degree in economics in 1975.

Back then, the economy suffered from a dangerous combination of stubborn inflation and stagnant growth - so-called stagflation. There are fears today that the U.S. may be heading in that direction again.

"We see little indication today of the beginnings of a 1970s-style wage-price spiral, in which wages and prices chased each other ever upward," Bernanke said at Harvard.

Then, as now, the U.S. endured a serious oil-price shock, sharply rising prices for food and other commodities, and subpar economic growth, he said.

Today's economy, however, is more flexible in responding to difficulties, and the country is more energy-efficient than a generation ago, Bernanke said.

"Since 1975, the energy required to produce a given amount of output in the United States has fallen by half," he said.

Over the years, Fed policymakers also have learned more about inflation and how to fight it, he said.

Bernanke's remarks come just one day after he said that the Fed's rate-cutting campaign was coming to an end because of increasing concerns about inflation. He took aim at the role of the weakened dollar in pushing prices higher. It was a rare public pronouncement by a Fed chairman about the U.S. greenback.

Also yesterday, the chief executive of Horsham-based Toll Brothers Inc., the nation's largest luxury-home builder, said that the housing industry was in a "depression" and that any recovery could be two or three years away.

Robert Toll said he's not ready to call a bottom yet because the housing market could still worsen. He said the crisis is the worst he's seen since the mid-1970s, but back then the decline was relatively short-lived. *