ABSTRACT
The breakdown of the international standard gave Governments and Central Banks a great measure of freedom to embark on independent policies; and the industrial revival experienced in certain countries, particularly those belonging to the sterling bloc, is to a large extent due to the use which has been made of this new freedom. The price and income structure of the country is susceptible to the influence of internal measures and of external fluctuations on the balance of payments. An independent policy, therefore, presupposes an "international margin" supplied by a favourable foreign balance. Long-run soundness is guaranteed if the deficits of the lean years are fully compensated by the surpluses of the fat years. The use of the budget as the handmaiden of credit policy must be part of a long-run financial plan which at least maintains the value of the national assets constant. Great advantages may follow from an official declaration regarding the policy to be pursued by the Central Bank.
