The Economics of Money, Banking, and Financial Markets set the standard for money and banking courses when it published in its first edition, and it continues to be the worldwide market leader. By applying a unified analytical framework to the models, Mishkin makes theory intuitive for students, and the rich array of current, real-world events keeps students motivated. Authoritative, comprehensive, and flexible, the text is easy to integrate into a wide variety of syllabi, and its ancillaries provide complete support when teaching the course.
This edition continues to expand on the discussion of the current financial crisis.
Features
- Mishkin’s unique viewpoint. Having just finished his term as Governor of the Federal Reserve, Mishkin brings a fresh perspective to today’s major policy questions. Insights into the monetary policy process, the regulation and supervision of the financial system, and internationalization of financial markets are integrated throughout.
- Flexibility. A core set of chapters provides a basic framework for learning and analysis to fit a wide variety of syllabi, and a unifying, analytic framework uses a few basic economic principles to organize students’ thinking. Careful, step-by-step model development makes the level appropriate for all students who take the course.
- Chapter pedagogy keeps students focused and motivated.
- Applications are integrated within the main text, and provide students the opportunity to see theory at work.
- Inside the Fed boxes reflect Mishkin’s experience at the Federal Reserve and give students insight into the operation and structure of the Federal Reserve System. Additional box features include Following the Financial News boxes, Global boxes, FYI boxes, and Wall Street Journal Applications.
- Review and study support are included in the form of chapter previews, summary tables, key statements, graphs, summaries, key terms, and a glossary.
- Practice opportunities appear in the end-of-chapter problems as well as online in MyEconLab® with its auto-graded exercises with personalized feedback and targeted tutorial help.
- Coverage of the latest data, questions, and theory are woven throughout, including:
- Late-breaking financial events and issues. Mishkin is committed to bringing in the latest data and events so that students understand the underlying economic implications.
- Coverage of China. China’s expanding role in the world economy is reflected through several discussions throughout the text. Topics include whether China is an argument against the importance of financial development (Chapter 8), problems in the Chinese banking industry (Chapter 12), and how China has become one of the largest holders of U.S. Treasury securities (Chapter 18).
- Material on monetary theory and policy. Drawing on his continued involvement with central banks, Mishkin integrates monetary theory and policy discussions, including:
- A section on whether price stability should be the primary goal of monetary policy and whether hierarchical or dual mandates are better for central banks in Chapter 13.
- An examination of the declining importance of reserve requirements in the money supply process in Chapter 14.
- An application of the impact of negative demand shocks on the U.S. economy from 2001 to 2004 in Chapter 22.
New to This Edition
This edition continues to expand on the discussion of the current financial crisis.
Updated and Revised Chapter 9: Financial Crises. The previous edition of this textbook contained a new chapter on financial crises, including the most recent one. It was written, however, before the global financial crisis was over. Now with the perspective of a couple of years after the crisis, this content has been substantially improved, including a reorganization of the chapter to tell a more coherent story and new sections, such as the run on the shadow banking system.
Compelling New Material on the Global Financial Crisis Throughout the Text. The aftermath of the global financial crisis of 2007-2009 has led to ongoing changes in the structure of the financial system and the way central banks operate. This has required the addition of many timely new sections, applications, and boxes throughout the rest of the book, including:
- A new box on Ireland and the 2007-2009 financial crisis (Chapter 9)
- A new Inside the Fed box on whether the Fed was to blame for the housing price bubble (Chapter 9)
- A new section on the Dodd-Frank bill and future regulation (Chapter 11)
- A new box on where the Basel Accord is heading after the global financial crisis (Chapter 11)
- A new box on the money supply during the 2007-2009 financial crisis (Chapter 14)
- A new section on nonconventional monetary policy tools (Chapter 15)
- A new section on quantitative versus credit easing (Chapter 15)
- A new Inside the Fed box on Federal Reserve lending facilities during the global financial crisis (Chapter 15)
- A new section on lessons for monetary policy strategy from the global financial crisis (Chapter 16)
- A new application on the fiscal stimulus package of 2009 (Chapter 20)
- A new application on autonomous monetary policy easing at the onset of the global financial crisis (Chapter 21)
- A new application on negative supply and demand shocks and the 2007–2009 financial crisis (Chapter 22)
- A new application on the United Kingdom and the 2007-2009 financial crisis (Chapter 22)
- A new application on China and the 2007-2009 financial crisis (Chapter 22)
- A new application on quantitative (credit) easing in response to the global financial crisis (Chapter 23)
- A new box on the activist/nonactivist debate over the Obama fiscal stimulus package (Chapter 23)
Table of Contents
Part 1: Introduction
Chapter 1: Why Study Money, Banking, and Financial Markets?
Chapter 2: An Overview of the Financial System
Chapter 3: What Is Money?
Part 2: Financial Markets
Chapter 4: Understanding Interest Rates
Chapter 5: The Behavior of Interest Rates
Chapter 6: The Risk and Term Structure of Interest Rates
Chapter 7: The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis
Part 3: Financial Institutions
Chapter 8: An Economic Analysis of Financial Structure
Chapter 9: Financial Crises
Chapter 10: Banking and the Management of Financial Institutions
Chapter 11: Economic Analysis of Financial Regulation
Chapter 12: Banking Industry: Structure and Competition
Part 4: Central Banking and the Conduct of Monetary Policy
Chapter 13: Central Banks and the Federal Reserve System
Chapter 14: The Money Supply Process
Chapter 15: The Tools of Monetary Policy
Chapter 16: The Conduct of Monetary Policy: Strategy and Tactics
Part 5: International Finance and Monetary Policy
Chapter 17: The Foreign Exchange Market
Chapter 18: The International Financial System
Part 6: Monetary Theory
Chapter 19: Quantity Theory, Inflation, and the Demand for Money
Chapter 20: The IS Curve
Chapter 21: The Monetary Policy and Aggregate Demand Curves
Chapter 22: Aggregate Demand and Supply Analysis
Chapter 23: Monetary Policy Theory
Chapter 24: The Role of Expectations in Monetary Policy
Chapter 25: Transmission Mechanisms of Monetary Policy
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