In a recent issue of this REVIEW, twelve papers were presented on the subject of government budgetary concepts.' Several authors indicated that the measuring of corporate income taxes on an accrual basis in the National Income and Product Accounts (NIPA) was to be preferred to measurement on a collection and payment basis.2 Among their reasons was the position that . . it [is] . generally . . . agreed that much of the economic impact of corporation income taxes occurs at the time the liability is accrued, rather than when the payment is actually made. . .. 3 The NIPA budget deals with income determining flows and does not record the financial asset and liability positions of the sectors.4 However, the income determining corporate income tax accrual in the NIPA budget is also the gross increase in a financial liability of the corporate sector. This note will suggest, therefore, that gross additions to the accrual tax flows cannot be meaningfully interpreted alone but must be modified by tax payments; that is, income determining data must be modified by changes in assets and liabilities when used to measure the contra-cyclical impact of corporate taxes.5 If accruals are rising faster than payments, the firm, in effect, has received an interest-free loan from the government to finance assets or repay debts. Such a situation is clearly expansionary (from both microand macroeconomic points of view) and parallels increased sources of funds (to the firm and the corporate sector) from other sources, e.g., bank loans, trade credit, etc. On the other hand, if payments exceed accruals, the firm and the corporate sector are reducing a debt and must either contract assets, borrow from another source, or expand equity. Such a situation is contractive in the same sense that the calling of a loan, the arrival of the due date of a security, or perhaps even the tightening of credit is contractive. In both situations, taxes affect profits at the time of accrual, but funds available to the firm increase in the former case and decrease in the latter. The upper panel of chart 1 shows flow of funds data (seasonably adjusted totals at annual rates) for corporate profits before tax (after inventory valuation adjustments), tax accruals on profits, and tax payments on profits. The lower panel of chart 1 shows the difference between accruals and pay-

The Problem This study is concerned with the incidence of governmental economic stabilization policies on the levels of output in selected industries. The specific problem under investigation is the following: What are the relative impacts of monetary and fiscal actions on the structure of output in selected industries? The study is concerned with some micro-economic aspects of economic stabilization policies, i.e., how these policies affect the equilibrium levels of output of some selected final goods. The importance of the problem under consideration is pointed out in the report of the Commission on Money and Credit (CMC).' In discussing the considerations of policy mix, the Commission states: