Contributions to monetary theory are reviewed, with emphasis on issues facing small open economies such as Australia. We consider the increased emphasis on information in commode it yes change, and the information content of different stabilization policies. ‘Ration’ expectations. Wealth effects, discretionary monetary policy and the alleged ‘death of Keynes’ are discussed in this context.The section on open economies discusses alternative models of exchange rate determination and monetary aspects of international transmission processes. The ‘problem’ of overshooting exchange rates is analyzed.The paper also reviews the debate on financial regulation and issues facing the Inquiry into the Australian Finan