PART I: INTRODUCTION 1. Why Study Money, Banking, and Financial Markets? 2. An Overview of the Financial System 3. What Is Money?   PART II: FINANCIAL MARKETS 4. The Meaning of Interest Rates 5. The Behavior of Interest Rates 6. The Risk and Term Structure of Interest Rates 7. The Stock Market, the Theory of Rational Expectations, and the EfficientMarket Hypothesis   PART III: FINANCIAL INSTITUTIONS  8. An Economic Analysis of Financial Structure 9. Banking and the Management of Financial Institutions 10. Economic Analysis of Financial Regulation 11. Banking Industry: Structure and Competition 12. Financial Crises in Advanced Economies 13. Financial Crises in Emerging Market Economies   PART IV: CENTRAL BANKING AND THE CONDUCT OF MONETARY POLICY   14. Central Banks 15. The Money Supply Process 16. Tools of Monetary Policy 17. The Conduct of Monetary Policy: Strategy and Tactics   PART V: INTERNATIONAL FINANCE AND MONETARY POLICY 18. The Foreign Exchange Market 19. The International Financial System   PART VI: MONETARY THEORY  20. Quantity Theory, Inflation, and the Demand for Money 21. The IS Curve 22. The Monetary Policy and Aggregate Demand Curves 23. Aggregate Demand and Supply Analysis 24. Monetary Policy Theory 25. The Role of Expectations in Monetary Policy 26. Transmission Mechanisms of Monetary Policy   ADDITIONAL CHAPTERS IN PEARSON PEARSON MYLAB ECONOMICS 1. Nonbank Finance 2. Financial Derivatives 3. Conflicts of Interest in the Financial Services Industry    

Timely coverage of important economic events NEW - Compelling new material on the coronavirus pandemic has been added to many sections, applications, and boxes throughout the book — casting a spotlight on the importance of banks, financial markets, and monetary policy to the health of the economy. Highlights include: NEW - A new application on the coronavirus stock market crash of 2020 (Chapter 7), and the likelihood that the pandemic could lead to another financial crisis (Chapter 12). NEW - A new application on the effects of quantitative easing on the money supply during the coronavirus crisis (Chapter 15), which shows how to apply the model of the money supply process to recent data. UPDATED - An update to the section on nonconventional monetary policy tools and quantitative easing to discuss how they were used during the coronavirus pandemic (Chapter 16). NEW - Coverage of other new developments in the field of money and banking keep the text current and relevant. They include: NEW - A new application on the effects of the Trump tax cuts on bond interest rates (Chapter 6), which shows how supply and demand analysis of the bond market can be used to explain the effect of taxes on different interest rates. NEW - New Inside the Fed boxes looking at the independence of the Fed (Chapter 14) and the modification of inflation targeting as a monetary policy tool. NEW - A Global box on the variation in central banks’ activism and the method of intervention on foreign exchange markets (Chapter 19). In addition, Chapters 18 and 19 have been heavily updated to include new running examples. NEW - A new FYI box on Modern Monetary Theory (Chapter 20), which discusses this new theory that argues that the Green New Deal can be easily paid for by having the Federal Reserve buy government bonds to fund the resulting large budget deficits.   A well thoughtout structure and organization facilitate effectiveteaching and learning A unifying, analytical framework uses a few basic economic principles that enable students to develop a disciplined, logical way of analyzing the structure of financial markets and understanding foreign exchange changes, financial institution management, and the role of monetary policy in the economy. A careful, step-by-step development of economic models (the approach used in the best principles of economics textbooks), makes it easier for students to learn about them. REVISED - A more real-world approach to monetary theory uses actual data when conducting aggregate demand and supply analysis of business cycle episodes. This makes analysis more relevant to students because they can now see the data in action. A flexible and modular design satisfies the diverse needs of instructors. Core chapters provide the basic analysis used throughout the book, and other chapters or sections of chapters can be used or omitted according to instructor preferences.   Learner-focused resources help students understand andretain the material Graphs and Mini-Lecture Videos with detailed captions help students clearly understand the interrelationships among the plotted variables and the principles of analysis. Global boxes cover international issues and provide a truly global perspective throughout the text. More than 50 Applications demonstrate how the analysis presented can be used to explain many important real-world situations. FYI boxes highlight dramatical historical episodes, interesting ideas, and intriguing facts related to the content of the chapter. More than 600 end-of-chapter questions and applied problems help students learn the subject matter by applying economic concepts.   Additional features help students develop their career skills UPDATED - Following the Financial News boxes introduce students to relevant news articles and data that are reported on daily in the press and teach students how to interpret this data — a skill that can make them more effective in their future jobs. UPDATED - Real-Time Data Figures in the eText pull real data from the Federal Reserve Bank of St. Louis’s FRED database to help explain economic concepts and events, such as the Covid-19 pandemic, showing students where and how they can access this information when they need to — now and throughout their career.  MyLab® Economics is not included. Students, if Pearson Pearson MyLab Economicsis a recommended/mandatory component of the course, please ask your instructorfor the correct ISBN. Pearson Pearson MyLab Economics should only be purchasedwhen required by an instructor. Instructors, contact your Pearsonrepresentative for more information.   Deliver trusted content Homework and practice exercises in MyLab are correlated to the exercises in the text, reflecting each author’s approach and learning style. They regenerate algorithmically to give students unlimited opportunity for practice and mastery. Easy to assign, Real-Time Data Analysis Exercises use up-to-the-minute, real-time macroeconomic data from the Federal Reserve Bank of St. Louis’s FRED™ site, to test students’ knowledge.   Empower learners Learning aids, such as Help Me Solve This, provide extra help for students at the point-of-use.

Timely coverage of important economic events Compelling new material on the coronavirus pandemic has been added to many sections, applications, and boxes throughout the book — casting a spotlight on the importance of banks, financial markets, and monetary policy to the health of the economy. Highlights include: A new application on the coronavirus stock market crash of 2020 (Chapter 7), and the likelihood that the pandemic could lead to another financial crisis (Chapter 12). A new application on the effects of quantitative easing on the money supply during the coronavirus crisis (Chapter 15), which shows how to apply the model of the money supply process to recent data. An update to the section on nonconventional monetary policy tools and quantitative easing to discuss how they were used during the coronavirus pandemic (Chapter 16). Coverage of other new developments in the field of money and banking keep the text current and relevant. They include: A new application on the effects of the Trump tax cuts on bond interest rates (Chapter 6), which shows how supply and demand analysis of the bond market can be used to explain the effect of taxes on different interest rates. New Inside the Fed boxes looking at the independence of the Fed (Chapter 14) and the modification of inflation targeting as a monetary policy tool. A new Global box on the variation in central banks’ activism and the method of intervention on foreign exchange markets (Chapter 19). In addition, Chapters 18 and 19 have been heavily updated to include new running examples. A new FYI box on Modern Monetary Theory (Chapter 20), which discusses this new theory that argues that the Green New Deal can be easily paid for by having the Federal Reserve buy government bonds to fund the resulting large budget deficits.   A well thoughtout structure and organization facilitate effectiveteaching and learning A more real-world approach to monetary theory uses actual data when conducting aggregate demand and supply analysis of business cycle episodes. This makes analysis more relevant to students because they can now see the data in action.   Additional features help students develop their career skills Following the Financial News boxes introduce students to relevant news articles and data that are reported on daily in the press and teach students how to interpret this data — a skill that can make them more effective in their future jobs. Real-Time Data Figures in the eText pull real data from the Federal Reserve Bank of St. Louis’s FRED database to help explain economic concepts and events, such as the Covid-19 pandemic, showing students where and how they can access this information when they need to — now and throughout their career.