Monetary theory

In this book I try to summarize the present state of the de bate in monetary theory as I see it. Recent efforts have suc ceeded in integrating monetary and general economic theory. Monetary problems can no longer be treated as being separate from the problems of prices and production. The theories of the business cycle, of income and employment, of saving and investment are so interlocked with the "theory of money" that a discussion of the essential problems of money and credit cannot be limited to the quantity theory and the general price level.

The institutional and historical characteristics of the various money and banking systems are ably described in the works of other authors. The main object of this book is to complement such treatments by a more detailed theoretical analysis. What I consider the essential features of the banking structure are introduced by way of illustration.

Many years of teaching experience have convinced me that the introduction of a large amount of factual data tends to confuse the student's understanding of the working of the monetary system. It is my hope that placing major emphasis upon theoretical problems will give the elementary student in money and banking a more lucid introduction to this field of economics.