ABSTRACT
Outside commentators on monetary developments sometimes create the impression that those responsible for operating monetary policy sit in front of a battery of switches and levers, each one of which will produce a precise and certain response in some area of the financial markets or directly in some more distant part of the economy. There is no question that co-ordination of fiscal and monetary policy has an important role to play in the effectiveness of policy overall and one is fortunate that the arrangements in that particular country adequately provide for this. In practice an important part of the monetary policy difficulties, running back for most of the post-war period has been the evident weakness of this influence. There is a popular perception that the monetary authorities dictate the general level of interest rates, and it is of course true that one is able to exert a very considerable influence on it.
