This book, for students and specialists in Monetary Economics, is the first systematic examination of monetary economics from a new monetary economics viewpoint – one in which markets provide financial services without recourse to traditional concepts of money. In this ground–breaking analysis Cowen and Kroszner: ∗ examine the potential consequences of a complete deregulation of money and banking. ∗ show how a deregulated financial system would evolve and whether the results would be desirable. ∗ analyse both the micro and the macroeconomic consequences of these changes. The authors synthesise Carl Menger's evolutionary theory of money with the modern writings of Black, Fama, Wallace and others. In such a system, currency use would dwindle or disappear, all media of exchange would pay interest, different media of exchange and account would compete with each other, privately issued exchange media would be evaluated and priced through electronic systems, and checkable mutual funds would replace banks, bringing about a fundamental transformation of monetary institutions.