T HIS paper traces the major developments of lasting value in our understanding of the monetary mechanism and its role in the economy which have occurred since the early forties, when the process of digesting the General Theory [ii] and integrating it with the earlier streams of thinking had been more or less completed. I consider here primarily the state of monetary thought as of about the mid-fifties, leaving to another time consideration of the evolution that has occurred since. The middle of the I950's provides, in my view, a useful landmark in reviewing the evolution of monetary and macroeconomic theory, since the developments that occurred up to that time are, on the whole, rather different in purpose and approach from those that have occurred later. The development in the first-mentioned period seems to me to consist largely of refinements, clarifications, and developments of the basic framework, which had already been laid out by the early forties. The most significant contributions in the more recent period, on the other hand, have tended to approach monetary issues in terms of the theory of asset management and portfolio decisions, exploiting concurrent advances in the theory of saving, in managerial economics and, most importantly, in the theory of choice under uncertainty. These developments, on the whole, have not led to any major revision or rejection of the positions reached by the midfifties, but have rather been concerned with providing a better understanding of the determinants of the demand for money and its relation with the demand and supply for various other assets, physical as well as financial, by final transactors and by financial intermediaries. This paper is, in essence, a summary of a longer and more rigorous statement which I expect to complete later, and which, together with an exploration of the developments since the I950's, will be published elsewhere when completed. Because it is in the nature of a summary, I have frequently found it necessary to sacrifice rigor and to omit nearly all of the proofs and many of the references. The material is divided into six major sections. The first is a brief comparison of a basic model of money and the economy which I believe would have been widely accepted about I944, with a corresponding model as of the middle of the 1950's. The following sections, then, examine in some detail the implications of the mid-fifties model for the relationship to crucial variables in the economy, and for major lines of monetary and fiscal policy.