The Economics of Money, Banking and Financial Markets

Series
Financial Times
Author
Kent Matthews / Massimo Giuliodori / Frederic S. Mishkin  
Publisher
Pearson
Cover
Softcover
Edition
1
Language
English
Total pages
704
Pub.-date
March 2013
ISBN13
9780273731801
ISBN
0273731807
Related Titles


Product detail

Product Price CHF Available  
9780273731801
The Economics of Money, Banking and Financial Markets
81.50

Description

Were you looking for the book with access to MyEconLab? This product is the book alone, and does NOT come with access to MyEconLab.  

 

This European adaptation takes Mishkin’s market leading text The Economics of Money, Banking and Financial Markets a step further placing the central themes in context for European students. It provides an in-depth overview and comparison of the structures, goals, tools and strategies of the European Central Bank, the Bank of England and the US Federal Reserve.

 

Mishkin’s application of a unified analytical framework to the models makes theory intuitive for students whilst 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.

   

Frederic Mishkinstudied at MIT and has taught at Columbia Business School since 1983.  He was a member of the Board of Governors of the Federal Reserve System from 2006 to 2008 and has been a consultant to the World Bank, the Inter-American Development Bank, and the International Monetary Fund, as well as to numerous central banks throughout the world

 

Kent Matthewsis the Sir Julian Hodge Professor of Banking and Finance at the Cardiff Business School.  He is a graduate of the London School of Economics, Birkbeck and Liverpool University and has held research posts at the LSE, National Institute of Economic & Social Research and Bank of England.

 

Massimo Giuliodori took his first degree at the University of Ancona (Italy) and his MSc in Economics and Finance at the University of Glasgow. After obtaining his PhD from the Scottish Doctoral Programme, he moved to the Amsterdam School of Economics of the University of Amsterdam, where he is now Associate Professor.

 

Features

  • An in–depth overview and comparison of the structure, goals, tools and strategies of the European Central Bank, the Bank of England and the US Federal Reserve.
  • A full review of the conventional and unconventional measures taken by the major central banks as a result of the global financial crisis.
  • An extension of Chapter 18 on the international financial system with a comprehensive discussion of the optimal currency area theory and an assessment of the optimality of Euro area.
  • 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.  
  • Applications are integrated within the main text using European examples and date to provide students the opportunity to see theory at work.
  • 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. 

 

Table of Contents

Preface

Guided tour

Authors’ acknowledgements

Publisher’s acknowledgements

Introduction

 

Part 1   Introduction

 

1 Why study money, banking and financial markets?

Why study financial markets?

Why study financial institutions and banking?

Why study money and monetary policy?

Why study international finance?

How will we study money, banking and financial markets?

Web exercises

Concluding remarks

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

Appendix to Chapter 1 Defining aggregate output, income, the price level and the inflation rate

 

2 An overview of the financial system

Function of financial markets

Structure of financial markets

Financial market instruments

Internationalization of financial markets

Function of financial intermediaries: indirect finance

Types of financial intermediaries

Regulation of the financial system

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

3 What is money? A comparative approach to measuring money

Meaning of money

Functions of money

Evolution of the payments system

Measuring money

Which is the most accurate monetary aggregate?

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

Part 2   Financial markets

 

4 Understanding interest rates

Measuring interest rates

The distinction between interest rates and returns

The distinction between real and nominal interest rates

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

5 The behaviour of interest rates

Determinants of asset demand

Supply and demand in the bond market

Changes in equilibrium interest rates

Supply and demand in the market for money: the liquidity preference framework

Changes in equilibrium interest rates in the liquidity preference framework

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

6 The risk and term structure of interest rates

Risk structure of interest rates

Term structure of interest rates

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

7 The stock market, the theory of rational expectations and the efficient market hypothesis

Computing the price of common stock

How the market sets stock prices

The theory of rational expectations

The efficient market hypothesis: rational expectations in financial markets

Behavioural finance

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

Part 3   Financial institutions

 

8 An economic analysis of financial structure

Basic facts about financial structure throughout the world

Transaction costs

Asymmetric information: adverse selection and moral hazard

The lemons problem: how adverse selection influences financial structure

How moral hazard affects the choice between debt and equity contracts

How moral hazard influences financial structure in debt markets

Conflicts of interest

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

9 Financial crises and the subprime meltdown

Factors causing financial crises

Dynamics of past financial crises in developed countries

The subprime financial crisis of 2007–8

Dynamics of financial crises in emerging market economies

Dynamics of the eurozone financial crisis

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

10   Banking and the management of financial institutions

The bank balance sheet

Basic banking

General principles of bank management

Managing credit risk

Managing interest-rate risk

Off-balance-sheet activities

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

11   Economic analysis of financial regulation

Asymmetric information and financial regulation

Advantages and disadvantages of bank regulation

Banking crises throughout the world

Whither financial regulation after the subprime financial crisis?

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

12   Banking industry: structure and competition

The single banking market in Europe

Competition and bank consolidation

Financial innovation and the growth of the ‘shadow banking system’

Structure of the European commercial banking industry

International banking

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

Part 4   Central banking

 

13   The goals and structure of central banks

The price stability goal and the nominal anchor

Other possible goals of monetary policy

Should price stability be the primary goal of monetary policy?

Structure of central banks

The Bank of England

The Federal Reserve System

The European Central Bank

Other central banks around the world

Should the central banks be independent?

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

14   The money supply process

Three players in the money creation process

The central bank’s balance sheet

Control of the monetary base

Multiple deposit creation: a simple model

The money multiplier

Factors that determine the money supply

Overview of the money creation process

Limits of the central bank’s ability to control the money supply

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

15   The tools of monetary policy

The market for reserves and the overnight interest rate

Open market operations

Standing facilities

Reserve requirements

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

16   The conduct of monetary policy: strategy and tactics

Monetary targeting

Inflation targeting

Monetary policy with an implicit nominal anchor

Tactics: choosing the policy instrument

Tactics: the Taylor rule

Central banks’ response to asset-price bubbles: lessons from the subprime crisis

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

Part 5   International finance and monetary policy

 

17   The foreign exchange market: exchange rates and applications

Foreign exchange market

Exchange rates in the long run

Exchange rates in the short run: a supply and demand analysis

Explaining changes in exchange rates

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

Appendix to Chapter 17   The interest parity condition

 

18   The international financial system

Intervention in the foreign exchange market

Balance of payments

Exchange rate regimes in the international financial system

Capital controls

The role of the IMF

International considerations and monetary policy

To peg or not to peg: exchange-rate targeting as an alternative monetary policy strategy

Currency boards, dollarization and monetary unions

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

Part 6   Monetary theory

 

19   The demand for money

Quantity theory of money

Is velocity a constant?

Keynes’s liquidity preference theory

Further developments in the Keynesian approach

Friedman’s modern quantity theory of money

Distinguishing between the Friedman and Keynesian theories

Empirical evidence on the demand for money

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

20   The ISLM model

Determination of aggregate output

The ISLM model

ISLM approach to aggregate output and interest rates

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

21   Monetary and fiscal policy in the ISLM model

Factors that cause the IS curve to shift

Factors that cause the LM curve to shift

Changes in equilibrium level of the interest rate and aggregate output

Effectiveness of monetary versus fiscal policy

ISLM models in the long run

ISLM model and the aggregate demand curve

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

22   Aggregate demand and supply analysis

Aggregate demand

Aggregate supply

Equilibrium in aggregate demand and supply analysis

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

23   Transmission mechanisms of monetary policy: the evidence

Framework for evaluating empirical evidence

Transmission mechanisms of monetary policy

Lessons for monetary policy

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

24   Money and inflation

Money and inflation: evidence

Meaning of inflation

Views of inflation

Origins of inflationary monetary policy

The discretionary/non-discretionary policy debate

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

25   Rational expectations: implications for policy

The Lucas critique of policy evaluation

New classical macroeconomic model

New Keynesian model

Comparison of the two new models with the traditional model

Impact of the rational expectations revolution

Summary

Key terms

Questions and problems

Web exercises

Notes

Web references

 

Glossary

Index

Back Cover

Were you looking for the book with access to MyEconLab? This product is the book alone, and does NOT come with access to MyEconLab.  

 

This European adaptation takes Mishkin’s market leading The Economics of Money, Banking and Financial Markets a step further placing the central themes in context for European students. It provides an in-depth overview and comparison of the structures, goals, tools and strategies of the European Central Bank, the Bank of England and the US Federal Reserve.

 

Mishkin’s application of a unified analytical framework to the models makes theory intuitive for students whilst 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.

   

Frederic Mishkinstudied at MIT and has taught at Columbia Business School since 1983.  He was a member of the Board of Governors of the Federal Reserve System from 2006 to 2008 and has been a consultant to the World Bank, the Inter-American Development Bank, and the International Monetary Fund, as well as to numerous central banks throughout the world

 

Kent Matthewsis the Sir Julian Hodge Professor of Banking and Finance at the Cardiff Business School.  He is a graduate of the London School of Economics, Birkbeck and Liverpool University and has held research posts at the LSE, National Institute of Economic & Social Research and Bank of England.

 

Massimo Giuliodori took his first degree at the University of Ancona (Italy) and his MSc in Economics and Finance at the University of Glasgow. After obtaining his PhD from the Scottish Doctoral Programme, he moved to the Amsterdam School of Economics of the University of Amsterdam, where he is now Associate Professor.

 


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