Money and Banking A Policy-Oriented Approach

by Croushore, Dean

• ISBN13: 9780618161256
• ISBN10: 0618161252
• Edition: 1st
• Format: Hardcover
• Copyright: 2006-02-13
• Publisher: South-Western College Pub

Summary

Combining a concise writing style with real-world applications, this innovative text takes a new approach to the money and banking course. Money and Banking examines the role the banking system plays in individual financial activities and considers the monetary policymaking that shapes the world's financial system. A highly respected teacher--and a leading expert on macroeconomic forecasting, with several years of experience at the Federal level--Croushore makes the personal and the public relevant and interesting to students. The text's shorter, more focused approach addresses the modern framework of today's financial system, in which both financial markets and banks play important roles. Designed to appeal to a range of learners, the pedagogical features include over 130 figures and 20 full-color photos and cartoons. The ancillary program, written entirely by the author, provides a well-integrated set of learning tools and teaching resources. The text's focus on policy issues and data appeals to students who want to see how theories about money and financial markets play out in the real world--both in their own financial activities and on a larger, societal scale. As a former macroeconomics expert with the Philadelphia Federal Reserve, Croushore brings an insider's perspective to the material, helping students understand the real-world complexities of economic policy. Carefully selected and tested by the author, the end-of-chapter problems include review, numerical, and analytical exercises. Data Bank boxed features explore how data collection affects real-world businesses, institutions, and investors; Policy Insider boxes highlight the author's experience with policy decision at the Federal level. Application to Everyday Life sections feature interesting examples to help students connect concepts in the text to their personal experiences, while chapter-ending Policy Issues focus on key policy decisions relevant to the reading. Key equations, key terms, marginal glossaries, and section summaries allow students to quickly and efficiently review important information in each chapter. The Eduspace online learning tool pairs the widely recognized resources of Blackboard with quality, text-specific content from Houghton Mifflin. Auto-graded homework based on end-of-chapter exercises, MP3 files of chapter summaries, and math review tutorials all come ready-to-use. Additional course management materials PowerPoint slides and Instructor's Resource Manual. MP3 audio files include chapter summaries to help students prepare students for quizzes and exams. These files are available at the Online Study Center and on the Eduspace site and Blackboard/WebCT course cartridges.

Table of Contents

Preliminary Contents

Introduction to Money and Banking

What's in This Text?

Ten (Surprising) Facts Concerning Money and Banking

Money and the Financial System

The Financial System and the Economy

Financial Securities

Matching Borrowers with Lenders Financial Markets

The Financial System

Application to Everyday Life: What Do Investors Care About

Money and Payments

How We Use Money

Counting Money Application to Everyday Life:What Do You Do with Your Change

Present Value

The Present Value of One Future Payment

The General Form of the Present-Value Formula

Using Present Value to Make Decisions

Using the Present-Value Formula to Calculate Payments

Looking Forward or Looking Backward at Returns

Application to Everyday Life: How to Negotiate a Car Lease

The Structure of Interest Rates

What Explains Differences in Interest Rates

The Term Structure of Interest Rates

The Term Premium

The Yield Curve and the Business Cycle

Policy Perspective: Can the Term Spread

Help Predict Recessions

Real Interest Rates

What Are Real Interest Rates

Real Present Value

What Affects Real Interest Rates

Application to Everyday Life: How Inflation and Taxes

Reduce Investors' Returns

Stocks and Other Assets

The Stock Market

How Can an Investor Profit in the Stock Market

Application to Everyday Life: Comparing Stocks with Bonds and Other Financial Investments

Fundamentals of Banking

How Banks Work

The Role of Banks

How Do Banks Earn Profits

Policy Perspective:Should the Fed

Let Reserve Requirements

Be Swept Away

Government's Role in Banking

Regulation of Banks Supervision of Banks

Policy Perspective: Should Mergers of Big Banks Be Allowed

Macroeconomics

Economic Growth and Business Cycles

Measuring Economic Growth Business Cycles

Application to Everyday Life: How Does Economic Growth

Affect Your Future Income

Modeling Money

The Atm Model of the Demand for Cash

The Liquidity-Preference Model

The Dynamic Model of Money Policy Perspective: Using Models of Money

Demand in Practice

The Aggregate-Demand/Aggregate-Supply Model

A Model of Aggregate Demand and Aggregate Supply

Analyzing Policy Using the Ad-As Model Large, Structural Macroeconomic Models

Policy Perspective: Did Large Macro Models

Mislead Policymakers in the 1970s

Modern Macroeconomic Models

Dynamic Models

Dynamic, Stochastic, General-Equilibrium Models

Statistical Models of the Economy Policy

Perspective: Do Modern Macroeconomic Models

Have Any Value for Policy

Economic Interdependence

The International Business Cycle

Exchange Rates Policy Perspective: How Independent Should a Country Be

Monetary Policy

The Federal Reserve System

Federal Reserve Banks

The Board of Governors

The Federal Open Market Committee Policy Perspective: Should the Federal Reserve Be So Independent

Monetary Control

Monetary Control Money Creation and Destruction by the Fed and by Banks

Realistic Money Multipliers

The Fed's Tools for Changing the Money Supply

The Market for Bank Reserves

Policy Perspective: Should the Fed Pay Interest on Reserves

Monetary Policy: Goals and Trade-Offs Stabilization Policy

Goals of Monetary Policy

The Fed's Objective Function Policy

Perspective: the Phillips Curve

Rules for Monetary Policy Rules Versus Discretion Money-Growth Rules

The Taylor Rule Inflation

Targeting Policy Issue: Why Don't Policymakers Follow Rules?

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