In Books III and IV of this treatise I propose a novel means of approach to the fundamental problems of monetary theory. My object has been to find a method which is useful in describing, not merely the characteristics of static equilibrium, but also those of disequilibrium, and to discover the dynamical laws governing the passage of a monetary system from one position of equilibrium to another. This discussion constitutes the kernel of volume I on The Pure Theory of Money. In volume 2, on The Applied Theory of Money, I have endeavoured to combine the quantitative method with the qualitative and have made as good an estimate as I can of the order of magnitude of the quantities entering into the argument, on the basis, mainly, of present-day facts in Great Britain and the United States. In this volume I have also described the salient features of modern banking and monetary systems, and have discussed the objects and methods of monetary management in the practical sphere.

As I read through the page proofs of this book I am acutely conscious of its defects. It has occupied me for several years, not free from other occupations, during which my ideas have been developing and changing, with the result that its parts are not all entirely harmonious with one another. The ideas with which I have finished up are widely different from those with which I began.