ABSTRACT
one of the main problems of stabilization policy is to decide what should be the object of stabilization. Shall it be export prices or producer prices, the terms of trade, the money income or real income of exporters or producers, the national income of the country, the available foreign exchange, or development expenditures? Any policy designed to affect any one of these variables may cause instability in others and run counter to other national policy objectives such as maximum foreign-exchange earnings or long-run growth. Policies can be devised only when the priorities for the particular country have been established. These in turn can be decided only after careful study of the particular problems facing individual countries, whose politics and concepts of economic welfare must be taken into account.
