Abstract
Money and the financial system. An introduction to money and the financial system. Money and the payments system. Financial instruments, financial markets, and financial institutions. Interest rates, financial instruments, and financial markets. Future vale, present value, and interest rates. Understanding risk. Bonds, bond prices, and the determination of interest rates. The risk and term structure of interest rates. Stocks, stock markets, and market efficiency. Derivatives : futures, options, and swaps. Foreign exchange. Financial institutions. The economics of financial intermediation. Depository institutions : banks and bank management. Financial industry structure. Regulating the financial system. Central banks, monetary policy, and financial stability. Central banks in the world today. The structure of central banks : the federal reserve and the European central bank. The central bank balance sheet and the money supply process. Monetary policy : stabilizing the domestic economy. Exchange-rate policy and the central bank. Modern monetary economics. Money growth, money demand, and modern monetary policy. Output, inflation, and monetary policy. Understanding business cycle fluctuations. Modern monetary policy and the challenges facing central bankers.
This book is organized to help students understand both the financial system and its economic effects on their lives. That means surveying a broad series of topics, including what money is and how it is used; what a financial instrument is and how it is valued; what a financial market is and how it works; what a financial institution is and why we need it; and what a central bank is and how it operates. More important, it means showing students how to apply the five core principles of money and banking to the evolving financial and economic arrangements that they inevitably will confront during their lifetimes.