Table of Contents
- About the Author
- Money, Banking, and Your World
- The Financial System
- Interest Rates
- The Economics of Interest-Rate Fluctuations
- The Economics of Interest-Rate Spreads and Yield Curves
- Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities
- Financial Structure, Transaction Costs, and Asymmetric Information
- Bank Management
- Innovation and Structure in Banking and Finance
- The Economics of Financial Regulation
- Financial Derivatives
- Financial Crises: Causes and Consequences
- Central Bank Form and Function
- The Money Supply Process and the Money Multipliers
- Monetary Policy Tools
- Monetary Policy Targets and Goals
- Foreign Exchange
- International Monetary Regimes
- Money Demand
- IS-LM in Action
- Aggregate Supply and Demand and the Growth Diamond
- Monetary Policy Transmission Mechanisms
- Inflation and Money
- Rational Expectations Redux: Monetary Policy Implications
Money and Banking, v. 2.0
by Robert E. Wright
Chapter 5 The Economics of Interest-Rate Fluctuations
By the end of this chapter, students should be able to
- Describe, at the first level of analysis, the factors that cause changes in the interest rate.
- List and explain four major factors that determine the quantity demanded of an asset.
- List and explain three major factors that cause shifts in the bond supply curve.
- Explain why the Fisher Equation holds; that is, explain why the expectation of higher inflation leads to a higher nominal interest rate.
- Predict, in a general way, what will happen to the interest rate during an economic expansion or contraction and explain why.
- Discuss how changes in the money supply may affect interest rates.