Innovations in financial markets and in financial management, together with dramatic innovations in the substance and technique of monetary theory, have made it necessary to restate the theory of money and the theory of monetary policy. In order to provide a new monetary theory, the author treats fully the following material: choice of currency and the theory of convertibility; interest on money; speculation and rational expectations; implications of electronic-transfer settlement procedures for monetary theory, as well as other matters. The theories of Tobin are developed and exposited in detail, as is the work of Friedman.

Supplies extensive material making it possible for the reader to understand how Thomas Jefferson's mind spanned the vast distance separating antiquity from writers like William James and Sigmund Freud, analyzing his studies in economics, moral philosophy, history and law.

Central banking is being turned upside down by innovations such as securitization, complex options dealings and Euro-asset transactions that are denationalizing money and making it impossible for central banks to regulate costs of capital. Nor can central banks modulate business cycles in open economies; study of banking policy and business fluctuations suggests that the 'real' importance of bank-credit changes has long been exaggerated. The new art of central banking may culminate in masterly inactivity.

Innovations in financial markets and in financial management, together with dramatic innovations in the substance and technique of monetary theory, have made it necessary to restate the theory of money and the theory of monetary policy. In order to provide a new monetary theory, the author treats fully the following material: choice of currency and the theory of convertibility; interest on money; speculation and rational expectations; implications of electronic-transfer settlement procedures for monetary theory, as well as other matters. The theories of Tobin are developed and exposited in detail, as is the work of Friedman.