ABSTRACT

We have in this work confined our examination of fiscal controls to proportionate direct taxes on income and to ad valorem indirect taxes, which, so long as the rates of tax are unchanged, exert an unchanged proportionate effect on the national income. Similarly in the case of monetary controls, we shall confme our attention to controls over rates of interest that, so long as the rates are unchanged, exert an unchanged proportionate effect on the economy rather than considering controls exercised through the quantity of money. In the case of fiscal controls, our choice is purely arbitrary. In the case of monetary controls, the choice is not at all arbitrary; there are in fact very substantial reasons for it.