Modeling Monetary Economies - 3rd Edition

This textbook is designed to be used in an advanced undergraduate course. The approach of this text is to teach monetary economics using the classical paradigm of rational agents in a market setting. Too often monetary economics has been taught as a collection of facts about existing institutions for students to memorize. By teaching from first principles instead, the authors aim to instruct students not only in the monetary policies and institutions that exist today in the United States and Canada, but also in what policies and institutions may or should exist tomorrow and elsewhere. The text builds on a simple, clear monetary model and applies this framework consistently to a wide variety of monetary questions. The authors have added in this third edition new material on money as a means of replacing imperfect social record keeping, the role of currency in banking panics and a description of the policies implemented to deal with the banking crises that began in 2007.

Preface Part I. Money: 1. A simple model of money 2. Barter and commodity money 3. Inflation 4. International monetary systems 5. Price surprises Part II. Banking: 6. Capital 7. Liquidity and financial intermediation 8. Central banking and the money supply 9. Money stock fluctuations 10. Fully backed central bank money 11. The payments system 12. Bank risk 13. Liquidity risk and bank panics Part III. Government Debt: 14. Deficits and the national debt 15. Savings and investment 16. The effect of the national debt on capital and savings 17. The temptation of inflation.