Just what should be included by the term ‘monetary policy’ is exceedingly difficult to define. It might be extended to comprehend any action that is concerned to influence the volume and character of the flows of money and of money substitutes throughout the economy. On a strict interpretation, this would embrace much of fiscal policy also, since action concerned with the raising and expenditure of the public revenues obviously has monetary effects. Indeed, I would make the distinction between monetary policy and fiscal policy only in order to emphasize, on the one hand, the vital role played by fiscal measures in determining monetary conditions and, on the other, the importance of supplementing monetary measures proper with consistent and powerful fiscal action.