This article is a summary of the papers presented at the Models of Monetary Economies II conference, hosted in May 2004 by the Federal Reserve Bank of Minneapolis and the University of Minnesota. It focuses on several themes in the papers, including the microfoundations of monetary theory, optimal monetary policy, and the role of banking, and also overviews how the contributions fit together. Finally, the article comments on monetary theory in general—how it has evolved and where it may be headed.
Reprinted, with permission, from the _International Economic Review_ (May 2005, vol. 46, no. 2, pp. 305–16): “Introduction to ‘Models of Monetary Economies II: The Next Generation’” by Randall Wright. © 2005 by Blackwell Publishing. https://doi.org/10.1111/j.1468-2354.2005.00319.x