Since it is everything about money, how much we have and whether we spend it or save it, it is of the essence to understand its origin and function throughout history. One of the functions of money is the investment into the economy to encourage its further development, therefore we can say that they are closely connected from the very beginning. Through this work, we will see how our ancestors exchanged goods before the advent of money. In order to understand the process of acquiring money, we have to learn about its function, history, types, etc. In the same manner, we should know how the faith in the monetary system of payment was established since paper money and coins do not have any real value beside payment. A vital role, in money and banking, has, of course, the state, and the central bank of a certain state as well. Thus, banks play the biggest role in connecting economy and getting a loan and enter into different components of the economy. We shall see as well, how monetary policy has affected the development of economy based on the Croatian example in the 90's.