ABSTRACT
the object of this chapter is to evaluate the usefulness of general fiscal and monetary weapons in combating export-induced instability in underdeveloped countries. The principles of such policies and the expected advantages, particularly vis-a-vis the more specific remedies examined in the previous chapter come up for discussion first. Second, the problems involved in designing and operating general economic policies with sufficiently sure and swift reactions to offset fluctuations are considered. Finally, the difficulties of reconciling policies for the maintenance of internal income stability with policies for the maintenance of the country’s ability to pay for imports (at least essential imports, without incurring serious depletion of reserves) are investigated.
