JNFLATION is colloquially described as a situation in which the flow of purchasing power is increasing faster than the flow of goods and services with consequent price increases. Most remedies for inflation stress contraction of the flow of purchasing power. In this article I shall argue that these remedies often need to be supplemented by and sometimes even replaced by measures to increase the flow of goods. In the United States, inflation is intimately bound up with the wage-price spiral, and persistent inflationary tendencies appear to present a difficult, if not insoluble, dilemma. Undoubtedly wage and price increases can be prevented by a sufficient contraction of demand. But contraction of demand may have to go so far as to conflict with the political imperative to maintain reasonably full employment. The authorities may thus face a serious conflict between the objectives of full employment and price stability. They may be forced to turn their remedies on and off in the hope that by pursuing first one objective and then the other a reconciliation may be achieved. I believe that the dilemma is less acute than it appears and that a resolution may be found if the inflation problem is handled in the context of a growing economy. But to do this a combined use of the available control instruments, and possibly of additional ones, is needed.'