Part I The principles of the new paradigm -- 1 Reflections on the current state of monetary economics --2 How finance differs -- 3 The ideal banking system -- 4 Restricted banking (or, the banking system of today) -- 5 Market equilibrium --6 From the corn economy to the monetary economy --7 Towards a general equilibrium theory of credit --Part II Applications of the new paradigm -- 8 Monetary policy-- 9 Regulatory policy and the new paradigm -- 10 Financial market liberalization --11 Restructuring the banking sector -- 12 Regional downturns and development and monetary policy --13 The East Asia crisis -- 14 The 1991 US recession and the recovery -- 15 The new paradigm and the "new economy" --16 Concluding remarks.