ABSTRACTPolicy–makers initially followed early Canterbury School prescriptions that favouredimmediatebudget balance and the rapid deflation of internal prices and wages. The 1932 Economic Committee formed a consensus favouring a policy package which had originally been formulated by Copland and Belshaw, and which included,inter alia, thegradualachievement of budget balance and the adjustment of external prices through exchange rate devaluation. A conservative Treasury line propounded by Park and Murphy emphasized sole reliance on deflationary measures but fell out of favour after 1933. Fisher’s long–run perspective did not appeal to policy–makers concerned with an immediate economic crisis.