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Cover of Money and Banking v3.0
Published: 
September 2017
Page Count: 
360
ISBN (Digital): 
978-1-4533-8709-2

Money and Banking

Version 3.0
By Robert E. Wright

Included Supplements

Key Features

  • Learning Objectives to introduce each chapter.
  • “Stop and Think” boxes to better extend concepts to new areas.
  • Practice exercises on mathematical concepts.
  • Customizable.

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This textbook is suitable for the following courses: Money and Banking and Financial Firms and Markets.

Wright discusses the subject of Money and Banking in a succinct and clear format for students. Leaving the more difficult mathematics for your classroom, the textbook covers all of the major topics and recent coverage. Version 3.0 features a new section that describes and assesses Islamic banking and insurance and includes up-to-date graphs to the latest available month or quarter.

New in This Version

  • New section on Islamic Banking and Financial Stability.
  • Updated time-series graphs through the end of 2016.
  • Added discussions of regulations and central banking practices.
  • About the Author
  • Acknowledgments
  • Preface

    • Chapter 1: Money, Banking, and Your World

  • 1.1 Dreams Dashed
  • 1.2 Hope Springs
  • 1.3 Suggested Browsing
  • 1.4 Suggested Reading

    • Chapter 2: The Financial System

  • 2.1 Evil and Brilliant Financiers?
  • 2.2 Financial Systems
  • 2.3 Asymmetric Information: The Real Evil
  • 2.4 Financial Instruments
  • 2.5 Financial Markets
  • 2.6 Financial Intermediaries
  • 2.7 Competition Between Markets and Intermediaries
  • 2.8 Regulation
  • 2.9 Suggested Reading

    • Chapter 3: Money

  • 3.1 Of Love, Money, and Transactional Efficiency
  • 3.2 Better to Have Had Money and Lost It Than to Have Never Had Money at All
  • 3.3 A Short History of Moolah
  • 3.4 Commodity and Credit Monies
  • 3.5 Measuring Money
  • 3.6 Suggested Reading

    • Chapter 4: Interest Rates

  • 4.1 The Interest of Interest
  • 4.2 Present and Future Value
  • 4.3 Compounding Periods
  • 4.4 Pricing Debt Instruments
  • 4.5 What’s the Yield on That?
  • 4.6 Calculating Returns
  • 4.7 Inflation and Interest Rates
  • 4.8 Suggested Reading

    • Chapter 5: The Economics of Interest Rate Fluctuations

  • 5.1 Interest Rate Fluctuations
  • 5.2 Shifts in Supply and Demand for Bonds
  • 5.3 Predictions and Effects
  • 5.4 Suggested Reading

    • Chapter 6: The Economics of Interest-Rate Spreads and Yield Curves

  • 6.1 Interest-Rate Determinants I: The Risk Structure
  • 6.2 The Determinants of Interest Rates II: The Term Structure
  • 6.3 Suggested Reading

    • Chapter 7: Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities

  • 7.1 The Theory of Rational Expectations
  • 7.2 Valuing Corporate Equities
  • 7.3 Financial Market Efficiency
  • 7.4 Evidence of Market Efficiency
  • 7.5 Suggested Reading

    • Chapter 8: Financial Structure, Transaction Costs, and Asymmetric Information

  • 8.1 The Sources of External Finance
  • 8.2 Transaction Costs, Asymmetric Information, and the Free-Rider Problem
  • 8.3 Adverse Selection
  • 8.4 Moral Hazard
  • 8.5 Agency Problems
  • 8.6 Suggested Reading

    • Chapter 9: Bank Management

  • 9.1 The Balance Sheet
  • 9.2 Assets, Liabilities, and T-Accounts
  • 9.3 Bank Management Principles
  • 9.4 Credit Risk
  • 9.5 Interest-Rate Risk
  • 9.6 Off the Balance Sheet
  • 9.7 Suggested Reading

    • Chapter 10: Innovation and Structure in Banking and Finance

  • 10.1 Early Financial Innovations
  • 10.2 Innovations Galore
  • 10.3 Loophole Mining and Lobbying
  • 10.4 Banking on Technology
  • 10.5 Banking Industry Profitability and Structure
  • 10.6 Suggested Reading

    • Chapter 11: The Economics of Financial Regulation

  • 11.1 Market Failures and Public Choice
  • 11.2 The Great Depression as Regulatory Failure
  • 11.3 The Savings and Loan Regulatory Debacle
  • 11.4 Better but Still Not Good: U.S. Regulatory Reforms
  • 11.5 Basel II, Basel III, and Dodd-Frank
  • 11.6 Suggested Reading

    • Chapter 12: Financial Derivatives

  • 12.1 Derivatives and Their Functions
  • 12.2 Forwards and Futures
  • 12.3 Options and Swaps
  • 12.4 Suggested Reading

    • Chapter 13: Financial Crises: Causes and Consequences

  • 13.1 Financial Crisis Taxonomies
  • 13.2 Asset Bubbles
  • 13.3 Financial Panics
  • 13.4 Lender of Last Resort (LLR)
  • 13.5 Bailouts and Resolutions
  • 13.6 The Crisis of 2007–2009
  • 13.7 Islamic Banking and Financial Stability
  • 13.8 Suggested Reading

    • Chapter 14: Central Bank Form and Function

  • 14.1 America’s Central Banks
  • 14.2 The Federal Reserve System’s Structure
  • 14.3 Other Important Central Banks
  • 14.4 Central Bank Independence
  • 14.5 Suggested Reading

    • Chapter 15: The Money Supply Process and the Money Multipliers

  • 15.1 The Central Bank’s Balance Sheet
  • 15.2 Open Market Operations
  • 15.3 A Simple Model of Multiple Deposit Creation
  • 15.4 A More Sophisticated Money Multiplier for M1
  • 15.5 The M2 Money Multiplier
  • 15.6 Summary and Explanation
  • 15.7 Suggested Reading

    • Chapter 16: Monetary Policy Tools

  • 16.1 The Federal Funds Market and Reserves
  • 16.2 Open Market Operations and the Discount Window
  • 16.3 Additional Policy Tools
  • 16.4 Suggested Reading

    • Chapter 17: Monetary Policy Targets and Goals

  • 17.1 A Short History of Fed Blunders
  • 17.2 Central Bank Goal Trade-offs
  • 17.3 Central Bank Targets
  • 17.4 The Taylor Rule
  • 17.5 Suggested Reading

    • Chapter 18: Foreign Exchange

  • 18.1 The Economic Importance of Currency Markets
  • 18.2 Determining the Exchange Rate
  • 18.3 Long-Run Determinants of Exchange Rates
  • 18.4 Short-Run Determinants of Exchange Rates
  • 18.5 Modeling the Market for Foreign Exchange
  • 18.6 Suggested Reading

    • Chapter 19: International Monetary Regimes

  • 19.1 The Trilemma, or Impossible Trinity
  • 19.2 Two Systems of Fixed Exchange Rates
  • 19.3 The Managed or Dirty Float
  • 19.4 The Choice of International Policy Regime
  • 19.5 Suggested Reading

    • Chapter 20: Money Demand

  • 20.1 The Simple Quantity Theory and the Liquidity Preference Theory of Keynes
  • 20.2 Friedman’s Modern Quantity Theory of Money
  • 20.3 The Policy Failure of the Modern Quantity Theory of Money
  • 20.4 Suggested Reading

    • Chapter 21: IS-LM

  • 21.1 Aggregate Output and Keynesian Cross Diagrams
  • 21.2 The IS-LM Model
  • 21.3 Suggested Reading

    • Chapter 22: IS-LM in Action

  • 22.1 Shifting Curves: Causes and Effects
  • 22.2 Implications for Monetary Policy
  • 22.3 Aggregate Demand Curve
  • 22.4 Suggested Reading

    • Chapter 23: Aggregate Supply and Demand and the Growth Diamond

  • 23.1 Aggregate Demand
  • 23.2 Aggregate Supply
  • 23.3 Equilibrium Analysis
  • 23.4 The Growth Diamond
  • 23.5 Suggested Reading

    • Chapter 24: Monetary Policy Transmission Mechanisms

  • 24.1 Modeling Reality
  • 24.2 How Important Is Monetary Policy?
  • 24.3 Transmission Mechanisms
  • 24.4 Suggested Reading

    • Chapter 25: Inflation and Money

  • 25.1 Empirical Evidence of a Money-Inflation Link
  • 25.2 Why Have Central Bankers So Often Gotten It Wrong?
  • 25.3 Suggested Reading

    • Chapter 26: Rational Expectations Redux: Monetary Policy Implications

  • 26.1 Rational Expectations
  • 26.2 New Keynesians
  • 26.3 Inflation Busting
  • 26.4 Suggested Reading
    • Instructor’s Manual

    Instructor’s Manual

    The Instructor’s Manual guides you through the main concepts of each chapter and important elements such as learning objectives, key terms, and key takeaways. Can include answers to chapter exercises, group activity suggestions, and discussion questions.

    Instructor’s Manual

    PowerPoint Lecture Notes

    PowerPoint Lecture Notes

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    PowerPoint Lecture Notes

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    Robert E. Wright Augustana College

    Robert E. Wright accepted the Nef Family Chair of Political Economy at Augustana University in 2009 after a decade of teaching economics at the University of Virginia and New York University’s Stern School. He received his Ph.D. in Economic History from SUNY, Buffalo and is the co-author and co-editor of almost forty books, including Wall Street Journal’s Guide to the 50 Economic Indicators and Guide to the U.S. Economic Policy.
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