Richard Mayne, the writer and broadcaster, tells the story of a newly prosperous Italian couple who decided to purchase a dining-table: not just another mass-produced item this time, but something of quality, bearing the mark of traditional craftsmanship. On a drive through the Abruzzi, they came across an old cabinet-maker, and amidst the stacks of maturing timber in his workshop they explained their request. Some weeks later they returned and were proudly shown the product of the craftsman's labour. ‘But,’ they exclaimed, ‘we asked for a square table. This one is not square, it's round!’ The cabinet-maker nodded. ‘Ah yes,’ he replied, his hand fondly tracing the grain along the table's top, ‘as I was making it, it became round’.

The present study began as an analysis of British external monetary policy in the 1930s, and became an account mainly of the 1920s. Archival research revealed that the explanation for policy decisions in the 1930s usually rested upon shorthand references to events in the earlier period. The issues had already been rehearsed, views clarified, and policy more or less settled. The earlier period offered the key to later policy, but it became clear that the analysis required extending in other directions as well. In the first place, monetary policy had to be placed within the broader context of domestic and economic decision-making. The economist may well advance theoretical knowledge by treating central bank or exchange rate decisions as discrete issues to be studied on their own.