This volume is the second collection of a series of lectures, held annually at City University, London, in honour of Henry Thornton, the renowned nineteenth-century monetary economist. As with the previous volume Monetary Economics in the 1980s, various aspects of monetary economics are examined further. The nine essays presented here are divided into four groups. Niels Thygesen, Roland Vaubel and Otmar Issing consider aspects of institutional design and its possible repercussions for monetary policy.

This theme is continued by Helmut Schlesinger and Charles Kindleberger in their discussion of the conduct of policy so as to maintain economic stability. This leads us on to the issues raised by David Laidler and Michael Mussa. Here consideration is given to business cycles, the relationship between wage and price stickiness and the implications for policy-makers.

1. The lecture by Robert Barro reviews discussions by David Ricardo concerning the significance of budget deficits and concludes with an examination of their implications for interest rates, savings and current account deficits. In a similar vein Robert Shiller examines the relationship between market efficiency and the cause of booms and crashes.