In a recent paper in this Review, Robert Van Order proposes an interesting simplification of the important model of Jerome Stein (1974). The purpose of this comment is to correct some errors in Van Order's analysis, to relate his results to Stein's later work (1976b,c), and to analyze the role of these papers in the current debate over the mechanisms and effectiveness of macroeconomic policy. For the convenience of the reader and to simplify the necessary references to Van Order's paper, his equations through (7') and relevant notation are reproduced: g, g*: actual and expected rates of inflation y: real output f: indicator of fiscal policy M, m: nominal and real money supply P, W: levels of prices and wages V: velocity of circulation n: growth rate of M X: speed of adjustment of expected inflation 9: ratio of bonds to money Functions: P: Phillips curve F: production function E: aggregate demand S: aggregate supply R: reduced form of E and S Van Order's equations are as follows: