Recent developments in monetary theory

This paper surveys recent work in monetary theory, with primary emphasis on material that has appeared since the writing of Harry Johnson's 1962 survey. The discussion deals with the following topics: (1) the theory of money demand, with special attention to inventory approaches; (2) money, inflation and growth; (3) the welfare cost of inflation, the optimum quantity of money, and inflationary finance; (4) disequilibrium theory; (5) the general equilibrium approach to monetary theory; (6) the new microfoundations of money; and (7) rational expectations and the Phillips Curve.