It is important to keep two closely related distinctions in mind when discussing the microeconomics of money: that between the social arrangement known as monetary exchange, and those assets known as money; and that between what Patinkin (1957) called the market experiment and individual experiment.

It was remarked at the outset of this paper that, in the 1920s,there existed a vigorous, diverse, and distinctly American literature dealing with monetary economics and the business cycle.