Make the link between theory and real-world easier for students with the most up-to-date Money and Banking text on the market today!
Hubbard/O'Brien's textbook presents Money, Banking, and the Financial System in the context of contemporary events, policy, and business with an integrated explanation of today’s financial crisis. Reviewers tell us that Hubbard/O'Brien helps make the link between theory and real-world easier for students!
The second edition retains the modern approach of the first edition, while incorporating several changes to address feedback from instructors and students and also to reflect the authors’ own classroom experiences.
Available with MyEconLab!
MyEconLab is a powerful assessment and tutorial system that works hand-in-hand with Money and Banking. MyEconLab includes comprehensive homework, quiz, test, and tutorial options, where instructors can manage all assessment needs in one program.
Hubbard and O'Brien provide extensive analysis of the financial events of the past few years. These events are sufficiently important to be incorporated into the body of the text rather than just added as boxed-off features. In particular, they stress the lesson policymakers recently learned the hard way: What happens in the ever-expanding part of the financial system that does not involve commercial banks is of vital importance to the entire economy.
This exciting text presents students with the underlying economic explanations of why the financial system is organized as it is and how the financial system is connected to the broader economy. Due to the overwhelming success of their principles of economics textbook, Hubbard and O'Brien have employed a similar approach in this textbook: They provide students with a framework that allows them to apply the theory that they learn in the classroom to the practice of the real world.
By learning this framework, students will understand not just the 2007—2009 financial crisis and other past events but also developments in the financial system during the years to come. To achieve this goal, they have built four advantages into this text:
1. A framework for understanding, evaluating, and predicting
2. A modern approach
3. Integration of international topics
4. A focus on the Federal Reserve
Seamless Integration of Contemporary Events. Each chapter-opening case provides a real-world context for learning that sparks students’ interest in money and banking, and helps to unify the chapter material.
Key Issue-and-Question Approach. Each chapter opens and closes with a Key Issue-and-Question that helps students put the chapter’s contents in context.
Making the Connection. Each chapter includes two to four Making the Connection features that present real-world reinforcement of key concepts. This feature helps students learn how to interpret the news and current events they read online and in newspapers.
Solved Problem. Two or three worked-out problems are included in each chapter of this text so students get a chance to practice the application of the concepts in action. This feature brings students through the problems that may see in the end-of-chapter exercises and other assessments.
An Inside Look. An Inside Look is a two-page feature that shows students how to apply the concepts from the chapter to the analysis of a news article. The article and analysis links back to the chapter-opening case.
Review Questions and Problems and Applications—Grouped by Learning Objective to Improve Assessment. All the end-of-chapter material—Summary, Review Questions, and Problems and Applications—is grouped under learning objectives. The goals of this organization are to make it easier for instructors to assign problems based on learning objectives, both in the book and in MyEconLab, and to help students efficiently review material that they find difficult.
MyEconLab New Design is now available for this title! MyEconLab New Design offers:
- One Place for All of Your Courses. Improved registration experience and a single point of access for instructors and students who are teaching and learning multiple MyLab/Mastering courses.
- A Simplified User Interface. The new user interface offers quick and easy access to Assignments, Study Plan, eText & Results, as well as additional option for course customization.
- New Communication Tools. The following new communication tools can be used to foster collaboration, class participation, and group work.
- Email: Instructors can send emails to their entire class, to individual students or to instructors who has access to their course.
- Discussion Board: The discussion board provides students with a space to respond and react to the discussions you create. These posts can also be separated out into specific topics where students can share their opinions/answers and respond to their fellow classmates’ posts.
- Chat/ ClassLive: ClassLive is an interactive chat tool that allows instructors and students to communicate in real time. ClassLive can be used with a group of students or one-on-one to share images or PowerPoint presentations, draw or write objects on a whiteboard, or send and received graphed or plotted equations. ClassLive also has additional classroom management tools, including polling and hand-raising.
- Enhanced eText. Available within the online course materials and offline via an iPad app, the enhanced eText allows instructors and students to highlight, bookmark, take notes, and share with one another.
- Note: If you are purchasing the standalone text (ISBN: 0-13-299491-7) or electronic version, MyEconLab does not come automatically packaged with the text. To purchase MyEconLab, please visit: www.myeconlab.com or you can purchase a package of the physical text + MyEconLab by searching the Pearson Higher Education web site. MyEconLab is not a self-paced technology and should only be purchased when required by an instructor.
New to this Edition
Summary of Key Changes
- Replaced 7 chapter-opening cases and updated retained cases.
- Added 16 new Making the Connection features, including several that appeal to students’ personal lives and decisions
- Added more than 40 new real-time data exercises that students can complete on MyEconLab.
- Added 2 new Solved Problems features, and updated retained Solved Problems. Some Solved Problems also involve subjects that appeal to students’ personal lives and decisions.
- Replaced or updated approximately one-half of the questions and problems at the end of each chapter.
- Updated graphs and tables with the latest available data.
New Chapter-Opening Cases
Each chapter-opening case provides a real-world context for learning, sparks students’ interest in money and banking, and helps to unify the chapter. The second edition includes the following new chapter-opening cases:
- “Will Investors Lose Their Shirts in the Market for Treasury Bonds?” (Chapter 3, “Interest Rates and Rates of Return”)
- “Are There Any Safe Investments?” (Chapter 4, “Determining Interest Rates”)
- “Searching for Yield” (Chapter 5, “The Risk Structure and Term Structure of Interest Rates”)
- “Using Financial Derivatives to Reduce Risk” (Chapter 7, “Derivatives and Derivative Markets”)
- “Is Ben Bernanke Responsible for Japanese Firms Moving to the United States?” (Chapter 8, “The Market for Foreign Exchange”)
- “Should You Crowd-Fund Your Startup?” (Chapter 9, “Transactions Costs, Asymmetric Information, and the Structure of the Financial System”)
- “To Buy a House, You Need a Loan” (Chapter 10, “The Economics of Banking”)
New Making the Connection Features and Supporting Exercises at the End of Each Chapter
Each chapter includes two or more Making the Connection features that provide real-world reinforcement of key concepts. Several of these Making the Connections cover topics that apply directly to the personal lives and decisions that students make and include the subtitle of In Your Interest.
- “Microlending Aids U.S. Small Businesses” (Chapter 1, “Introducing Money and the Financial System”)
- “What Do People Do with Their Savings?” (Chapter 1, “Introducing Money and the Financial System”)
- “In Your Interest: Interest Rates and Student Loans” (Chapter 3, “Interest Rates and Rates of Return”)
- “Why Are Bond Interest Rates So Low?” (Chapter 4, “Determining Interest Rates”)
- “In Your Interest: Should You Invest in Junk Bonds?” (Chapter 5, “The Risk Structure and Term Structure of Interest Rates”)
- “In Your Interest: Should You Invest in Emerging Markets?” (Chapter 8, “The Market for Foreign Exchange”)
- “In Your Interest: Is It Safe to Invest Through Crowd-funding?” (Chapter 9, “Transactions Costs, Asymmetric Information, and the Structure of the Financial System”)
- “In Your Interest: Corporations Are Issuing More Bonds; Should You Buy Them?” (Chapter 9, “Transactions Costs, Asymmetric Information, and the Structure of the Financial System”)
- “In Your Interest: Your Bank’s Message to You: ‘Please Go Away!’” (Chapter 10, “The Economics of Banking”)
- In Your Interest: “Is Your Neighborhood ATM About to Disappear?”
(Chapter 10, “The Economics of Banking”)
- “In Your Interest: Would You Invest in a Hedge Fund if You Could?”
(Chapter 11, “Investment Banks, Mutual Funds, Hedge Funds, and the Shadow Banking System”)
- “Greece Experiences a ‘Bank Jog’ ” (Chapter 12, “Financial Crises and Financial Regulation”)
- “The Consumer Financial Protection Bureau: The New Sheriff of Financial Town” (Chapter 12, “Financial Crises and Financial Regulation”)
- “Fedspeak vs. Transparency” (Chapter 13, “The Federal Reserve and Central Banking”)
- “In Your Interest: If You Were Greek, Would You Prefer the Euro or the Drachma?” (Chapter 16, “The International Financial System and Monetary Policy”)
- “ ‘Fracking’ Transforms Energy Markets in the United States” (Chapter 17, “Monetary Theory I: The Aggregate Demand and Aggregate Supply Model”)
Added More Than 40 New Real-Time Data Exercises That Students Can Complete on MyEconLab
MyEconLab is a powerful assessment and tutorial system that works hand-in-hand with Money, Banking, and the Financial System. MyEconLab includes comprehensive homework, quiz, test, and tutorial options, allowing instructors to manage all assessment needs in one program. Key innovations in the MyEconLab course for Money, Banking, and the Financial System, second edition, include the following:
- Real-time Data Analysis Exercises, marked with , allow students and instructors to use the absolute latest data from FRED, the online macroeconomic data bank from the Federal Reserve Bank of St. Louis. By completing the exercises, students become familiar with a key data source, learn how to locate data, and develop skills to interpret data.
- In the eText available in MyEconLab, select figures labeled MyEconLab Real-time data allow students to display a popup graph updated with real-time data from FRED.
- Current News Exercises, new to this edition of the MyEconLab course, provide a turnkey way to assign gradable news-based exercises in MyEconLab. Every week, Pearson scours the news, finds a current article appropriate for the money and banking course, creates an exercise around this news article, and then automatically adds it to MyEconLab. Assigning and grading current news-based exercises that deal with the latest money, banking, financial system events and policy issues has never been more convenient.
- New Solved Problems—Many students have great difficulty handling problems in applied economics. We help students overcome this hurdle by including worked-out problems in each chapter. The following Solved Problems are new to this edition:
- “In Your Interest: How Do You Value a College Education?” (Chapter 3, “Interest Rates and Rates of Return”)
- “In Your Interest: Should You Worry About Falling Bond Prices When the Inflation Rate Is Low?” (Chapter 4, “Determining Interest Rates”)
- Replaced or updated approximately one-half of the questions and problems at the end of each chapter
- Updated graphs and tables with the latest available data
Table of Contents
PART I. FOUNDATIONS
1. Introducing Money and the Financial System
2. Money and the Payments System
3. Interest Rates and Rates of Return
4. Determining Interest Rates
PART II. FINANCIAL MARKETS
5. The Risk Structure and Term Structure of Interest Rates
6. The Stock Market, Information, and Financial Market Efficiency
7. Derivatives and Derivative Markets
8. The Market for Foreign Exchange
PART III. FINANCIAL INSTITUTIONS
9. Transactions Costs, Asymmetric Information, and the Structure of the Financial System
10. The Economics of Banking
11. Investment Banks, Mutual Funds, Hedge Funds, and the Shadow Banking System
12. Financial Crises and Financial Regulation
PART IV. MONETARY POLICY
13. The Federal Reserve and Central Banking
14. The Federal Reserve’s Balance Sheet and the Money Supply Process
15. Monetary Policy
16. The International Financial System and Monetary Policy
PART V. THE FINANCIAL SYSTEM AND THE MACROECONOMY
17. Monetary Theory I: The Aggregate Demand and Aggregate Supply Model
18. Monetary Theory II: The IS—MP Model