Monetary Theory is a comprehensive textbook that meets the needs of students at the honours and post-graduate level. The sixteenth edition has been thoroughly revised and updated. The book is divided into five parts viz Money and Prices; Trade Cycle and Stabilisation; Saving, Investment and Interest; Banking, Credit and Foreign Exchange; and International Monetary Institutions. In Part One, Milton Friedman’s Quantity Theory of Money has been updated. In Part Two, the chapter on Inflation has been improved by elaborating the topics on Inflation Targeting and Stagflation. Apart from this, a new chapter on Complex Multipliers has been incorporated in the book. Under Part Four, in Chapter 32 the topic on the purchasing power parity theory of foreign exchange rate determination has been updated. Similarly, all the chapters in Part Four and Part Five have been thoroughly revised. The post-economic reforms period portion of chapter 38 on the monetary policy in India has been updated till 2004-2005. Under Part Five all the six chapters including those on the IMF; International Liquidity; Eurocurrency Market; IBRD; IDA and the ADB have been revised and updated by incorporating the latest available academic literature. Throughout the book has been illustrated with the help of neatly drawn diagrams. The book covers the course contents of the monetary economics paper, it also substantially covers the course contents of the macroeconomic theory paper prescribed at the honours and postgraduate levels by the universities in India. The book will also be helpful to the students in the preparation for the competitive examinations at various levels.