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Modeling Monetary Economies

4th Edition

$69.99 (X)

  • Date Published: May 2016
  • availability: In stock
  • format: Paperback
  • isbn: 9781316508671
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About the Authors
  • Too often monetary economics has been taught as a collection of facts about institutions for students to memorize. By teaching from first principles instead, this advanced undergraduate textbook builds on a simple, clear monetary model and applies this framework consistently to a wide variety of monetary questions. Starting with the case in which trade is mutually beneficial, the book demonstrates that money makes people better off, and that government money competes against other means of payments, including other types of government money. After developing each of these topics, the book tackles the issue of money competing against other stores of value, examining issues associated with trade, finance, and modern banking. The book then moves from simple economies to modern economies, addressing the role banks play in making more trades possible, concluding with the information problems plaguing modern banking, which result in financial crises.

    • Simplifies the economy by starting with two markets in general equilibrium, allowing students to develop comfort with two markets before extending the structure by adding an additional market as needed
    • Shows where calculus could be used, but focuses on budget constraints and requires students to apply substitution method
    • Events like the 2007–8 Financial Crisis (Great Recession) are analyzed in the context of the model economy, therefore allowing students to see the fundamental economic trade-offs
    • Additional resources include PPT slides and a solutions manual containing end-of-chapter questions with answers
    Read more

    Reviews & endorsements

    "This is my favorite textbook for my undergraduate course in monetary economics. It requires only a small investment in order to familiarize the students with the overlapping generations model. Thereafter, the book covers a broad set of topics by building simple extensions of the basic model. My students love it and I can also highly recommend it to any reader interested in money, banking, and monetary policy."
    Aleksander Berentsen, University of Basel, Switzerland

    "In this book, Professor Haslag, a first-rate economist with a theoretical bent, takes the reader into the landscape of modern monetary economics to help us make sense of the deep questions: what does money do? Why do we have money? Why is banking important? Why is inflation bad? And many others. The book uses the overlapping generations model as its workhorse to study a vast range of issues such as money supply, inflation, financial intermediation and banking, and payments systems. The writing, as always, is lucid, precise, and engaging. I can think of no other undergraduate textbook in macro- or monetary economics that infects the reader with as much passion for the craft of economics as this one."
    Joydeep Bhattacharya, Iowa State University

    "This book is the most rigorous and accessible treatment of monetary issues based on dynamic, micro-founded models of monetary exchange for advanced undergraduate students. It answers fundamental questions: why is fiat money valued? Can money coexist with interest-bearing assets? What is the role of banks and central banks? It also addresses topical questions relative to payment systems, liquidity risk, and the effects of the national debt on future growth. It is a must-read for all students eager to learn advanced monetary economics."
    Guillaume Rocheteau, University of California, Irvine

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    Customer reviews


    A classic textbook on monetary theory for undergrads. Initially, I was a bit apprehensive about the way students would react to the OLG approach. I have taught with this book twice now and it was fantastic. The students eventually warmed up to the models and then it became easier with the extensions. The current edition is also a significant improvement- looking forward to teaching with it in Fall 2016. The availability of powerpoint slides just improved the usability of this book hundredfold. Great job! Parag Waknis, UMass Dartmouth, USA

    Review was not posted due to profanity


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    Product details

    • Edition: 4th Edition
    • Date Published: May 2016
    • format: Paperback
    • isbn: 9781316508671
    • dimensions: 254 x 178 x 22 mm
    • weight: 0.71kg
    • contains: 108 b/w illus. 25 tables
    • availability: In stock
  • Table of Contents

    Part I. Money:
    1. Trade in a model with no frictions
    2. A simple model of money
    3. Barter and commodity money
    4. Inflation
    5. International monetary systems
    6. Price surprises
    Part II. Banking:
    7. Capital
    8. Liquidity and financial intermediation
    9. Central banking and the money supply
    10. Money stock fluctuations
    11. Fully backed central bank money
    12. The payments system
    13. Bank risk
    14. Liquidity risk and bank panics
    Part III. Government Debt:
    15. Deficits and the national debt
    16. Savings and investment
    17. The effect of the national debt on capital and savings
    18. The temptation of inflation
    Author index
    Subject index.

  • Resources for

    Modeling Monetary Economies

    Bruce Champ, Scott Freeman, Joseph Haslag

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  • Authors

    Bruce Champ
    Bruce Champ was a Senior Research Economist at the Federal Reserve Bank of Cleveland, and passed away in 2013. Earlier he taught at Virginia Polytechnic Institute, the Universities of Iowa and Western Ontario, and Fordham University, New York. Dr Champ's research interests focused on monetary economics and his articles have appeared in the American Economic Review, the Journal of Monetary Economics, the Canadian Journal of Economics, and the Journal of Money, Credit, and Banking, among other leading academic publications. He coauthored the first and second editions of Modeling Monetary Economies with the late Scott Freeman.

    Scott Freeman
    Scott Freeman was a Professor of Economics at the University of Texas, Austin. He taught earlier at Boston College and the University of California, Santa Barbara. He died in 2004. Professor Freeman specialized in monetary theory, and his articles appeared in the Journal of Political Economy, the American Economic Review, the Journal of Monetary Economics, and the Journal of Money, Credit, and Banking, among other eminent academic journals.

    Joseph Haslag, University of Missouri, Columbia
    Joseph Haslag is Professor and Kenneth Lay Chair in Economics at the University of Missouri. Professor Haslag received his PhD in Economics from Southern Methodist University, Texas in 1987. Professor Haslag spent 12 years in the Research Department at the Federal Reserve Bank of Dallas, teaching graduate and undergraduate courses at Southern Methodist University. He visited the Economics Department at Michigan State University in 2000 and the Department of Monetary Economics at Erasmus University, Rotterdam in 1994. He has published his research in such prestigious academic journals as the Journal of Monetary Economics, the Journal of Money, Credit, and Banking, The Review of Economics and Statistics, the International Economic Review, and the Review of Economic Dynamics, among other leading academic journals.

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