ABSTRACT
If it be agreed that, as far as possible, financial inducements rather than direct controls should be used as a means of achieving our economic objectives, the question arises how far financial policy and the price mechanism can be used to deal with the most fundamental of all our present problems—namely, the restoration of equilibrium to our disordered balance of payments. The application of the price mechanism in this case presents special difficulty, since it depends not only upon our own choice between the price mechanism and direct controls, but also upon what other countries are doing. Nevertheless, my own view is that a great deal can be achieved by the proper use of the money and price mechanisms.
