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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.Read more
- 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
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, SwitzerlandSee more reviews
"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
06th Sep 2016 by User17321354097645
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
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- 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
5. International monetary systems
6. Price surprises
Part II. Banking:
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
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