We live in tumultuous times—memo r ies of an extrao r dinary financial crisis are still with us while we experience a once-in-a-century pa ndemic. Governments around the wo r ld are spending money at fabulous rates. These circumstances cause us to ask, What is money a nd wh ere does it come fr om? What determines its value, in terms of real economic resources (goods a nd services)? What determines the price level, what determines inflation? To answer these questions, we need a theo r y of money a nd inflation.