The Economics of Money; Banking and Financial Markets (12th Global Edition)

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Download The Economics of Money; Banking and Financial Markets (12th Global Edition) written by Frederic S. Mishkin in PDF format. This book is under the category Economics and bearing the isbn/isbn13 number 1292268859/9781292268859/ 9780134733821/ 9781292268927. You may reffer the table below for additional details of the book.

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For programs in banking and cash; or normal economics.

A unified define for understanding monetary markets

Mishkin’s The Economics of Money; Banking and Financial Markets; 12th Global Edition; (PDF) brings a recent perspective to right now’s main questions round monetary coverage. Influenced by his time as Governor of the Federal Reserve; Frederic Mishkin presents to economics and finance college students a novel viewpoint and knowledgeable perception into the financial coverage course of; the regulation and supervision of the monetary system; and the internationalization of monetary markets. The twelfth Edition; Global Edition; presents a unifying; analytic framework for studying that matches a broad selection of syllabi. Core financial ideas and actual-world examples construct college students’ pondering and hold them motivated.

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Additional information

book-author

Frederic S. Mishkin

publisher

Pearson; 12th edition (Global)

file-type

PDF

pages

Pages

language

English

isbn10

1292268859

isbn13

9781292268859/ 9780134733821/ 9781292268927

Table of contents


Table of contents :
Cover
Title Page
Copyright Page
About the Author
Brief Contents
Contents in Detail
Preface
Acknowledgments
Global Acknowledgments
Summary
Part 1: Introduction
Chapter 1: Why Study Money, Banking, and Financial Markets?
Why Study Financial Markets?
Debt Markets and Interest Rates
The Stock Market
Why Study Financial Institutions and Banking?
Structure of the Financial System
Banks and Other Financial Institutions
Financial Innovation
Financial Crises
Why Study Money and Monetary Policy?
Money and Business Cycles
Money and Inflation
Money and Interest Rates
Conduct of Monetary Policy
Fiscal Policy and Monetary Policy
Why Study International Finance?
The Foreign Exchange Market
The International Financial System
Money, Banking, and Financial Markets and Your Career
How We Will Study Money, Banking, and Financial Markets
Exploring the Web
Concluding Remarks
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Appendix to Chapter 1: Defining Aggregate Output, Income, the Price Level, and the Inflation Rate
Aggregate Output and Income
Real Versus Nominal Magnitudes
Aggregate Price Level
Growth Rates and the Inflation Rate
Chapter 2: An Overview of the Financial System
Function of Financial Markets
Structure of Financial Markets
Debt and Equity Markets
Primary and Secondary Markets
Exchanges and Over-the-Counter Markets
Money and Capital Markets
Financial Market Instruments
Money Market Instruments
Following the Financial News Money Market Rates
Capital Market Instruments
Following the Financial News Capital Market Interest Rates
Internationalization of Financial Markets
Global Are U.S. Capital Markets Losing Their Edge?
International Bond Market, Eurobonds, and Eurocurrencies
World Stock Markets
Function of Financial Intermediaries: Indirect Finance
Following the Financial News Foreign Stock Market Indexes
Transaction Costs
Global The Importance of Financial Intermediaries Relative to Securities Markets: An International Comparison
Risk Sharing
Asymmetric Information: Adverse Selection and Moral Hazard
Economies of Scope and Conflicts of Interest
Types of Financial Intermediaries
Depository Institutions
Contractual Savings Institutions
Investment Intermediaries
Regulation of the Financial System
Increasing Information Available to Investors
Ensuring the Soundness of Financial Intermediaries
Financial Regulation Abroad
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 3: What Is Money?
Meaning of Money
Functions of Money
Medium of Exchange
Unit of Account
Store of Value
Evolution of the Payments System
Commodity Money
Fiat Money
Checks
Electronic Payment
E-Money
FYI: Are We Headed for a Cashless Society?
Application: Will Bitcoin Become the Money of the Future?
Measuring Money
The Federal Reserve’s Monetary Aggregates
Following the Financial News The Monetary Aggregates
FYI: Where Are All the U.S. Dollars?
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Part 2: Financial Markets
Chapter 4: The Meaning of Interest Rates
Measuring Interest Rates
Present Value
Application: Simple Present Value
Application: How Much Is That Jackpot Worth?
Four Types of Credit Market Instruments
Yield to Maturity
Application: Yield to Maturity on a Simple Loan
Application: Yield to Maturity and the Yearly Payment on a Fixed-Payment Loan
Application: Yield to Maturity and Bond Price for a Coupon Bond
Application: Yield to Maturity on a Perpetuity
Application: Yield to Maturity on a Discount Bond
The Distinction Between Interest Rates and Returns
Global Negative Interest Rates? Japan First, Then the United States, Then Europe
Maturity and the Volatility of Bond Returns: Interest-Rate Risk
Summary
The Distinction Between Real and Nominal Interest Rates
Application: Calculating Real Interest Rates
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 5: The Behavior of Interest Rates
Determinants of Asset Demand
Wealth
Expected Returns
Risk
Liquidity
Theory of Portfolio Choice
Supply and Demand in the Bond Market
Demand Curve
Supply Curve
Market Equilibrium
Supply and Demand Analysis
Changes in Equilibrium Interest Rates
Shifts in the Demand for Bonds
Shifts in the Supply of Bonds
Application: Changes in the Interest Rate Due to a Change in Expected Inflation: The Fisher Effect
Application: Changes in the Interest Rate Due to a Business Cycle Expansion
Application: Explaining Current Low Interest Rates in Europe, Japan, and the United States: Low Inflation and Secular Stagnation
Supply and Demand in the Market for Money: The Liquidity Preference Framework
Changes in Equilibrium Interest Rates in the Liquidity Preference Framework
Shifts in the Demand for Money
Shifts in the Supply of Money
Application: Changes in the Equilibrium Interest Rate Due to Changes in Income, the Price Level, or the Money Supply
Changes in Income
Changes in the Price Level
Changes in the Money Supply
Money and Interest Rates
Application: Does a Higher Rate of Growth of the Money Supply Lower Interest Rates?
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 6: The Risk and Term Structure of Interest Rates
Risk Structure of Interest Rates
Default Risk
FYI: Conflicts of Interest at Credit-Rating Agencies and the Global Financial Crisis
Application: The Global Financial Crisis and the Baa-Treasury Spread
Liquidity
Income Tax Considerations
Summary
Application: Effects of the Obama Tax Increase on Bond Interest Rates
Term Structure of Interest Rates
Following the Financial News Yield Curves
Expectations Theory
Segmented Markets Theory
Liquidity Premium and Preferred Habitat Theories
Evidence on the Term Structure
FYI: The Yield Curve as a Forecasting Tool for Inflation and the Business Cycle
Summary
Application: Interpreting Yield Curves, 1980–2017
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 7: The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis
Computing the Price of Common Stock
The One-Period Valuation Model
The Generalized Dividend Valuation Model
The Gordon Growth Model
How the Market Sets Stock Prices
Application: Monetary Policy and Stock Prices
Application: The Global Financial Crisis and the Stock Market
The Theory of Rational Expectations
Formal Statement of the Theory
Rationale Behind the Theory
Implications of the Theory
The Efficient Market Hypothesis: Rational Expectations in Financial Markets
Rationale Behind the Hypothesis
Random-Walk Behavior of Stock Prices
Global Should Foreign Exchange Rates Follow a Random Walk?
Application: Practical Guide to Investing in the Stock Market
How Valuable Are Reports Published by Investment Advisers?
Should You Be Skeptical of Hot Tips?
FYI: Should You Hire an Ape as Your Investment Adviser?
Do Stock Prices Always Rise When There Is Good News?
Efficient Market Prescription for the Investor
Why the Efficient Market Hypothesis Does Not Imply That Financial Markets Are Efficient
Application: What Do Stock Market Crashes Tell Us About the Efficient Market Hypothesis and the Efficiency of Financial Markets?
Behavioral Finance
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Part 3: Financial Institutions
Chapter 8: An Economic Analysis of Financial Structure
Basic Facts About Financial Structure Throughout the World
Transaction Costs
How Transaction Costs Influence Financial Structure
How Financial Intermediaries Reduce Transaction Costs
Asymmetric Information: Adverse Selection and Moral Hazard
The Lemons Problem: How Adverse Selection Influences Financial Structure
Lemons in the Stock and Bond Markets
Tools to Help Solve Adverse Selection Problems
FYI: The Enron Implosion
How Moral Hazard Affects the Choice Between Debt and Equity Contracts
Moral Hazard in Equity Contracts: The Principal–Agent Problem
Tools to Help Solve the Principal–Agent Problem
How Moral Hazard Influences Financial Structure in Debt Markets
Tools to Help Solve Moral Hazard in Debt Contracts
Summary
Application: Financial Development and Economic Growth
FYI: The Tyranny of Collateral
Application: Is China a Counterexample to the Importance of Financial Development?
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 9: Banking and the Management of Financial Institutions
The Bank Balance Sheet
Liabilities
Assets
Basic Banking
General Principles of Bank Management
Liquidity Management and the Role of Reserves
Asset Management
Liability Management
Capital Adequacy Management
Application: Strategies for Managing Bank Capital
Application: How a Capital Crunch Caused a Credit Crunch During the Global Financial Crisis
Managing Credit Risk
Screening and Monitoring
Long-Term Customer Relationships
Loan Commitments
Collateral and Compensating Balances
Credit Rationing
Managing Interest-Rate Risk
Gap and Duration Analysis
Application: Strategies for Managing Interest-Rate Risk
Off-Balance-Sheet Activities
Loan Sales
Generation of Fee Income
Trading Activities and Risk Management Techniques
Global Barings, Daiwa, Sumitomo, Société Générale, and JP Morgan Chase: Rogue Traders and the Principal–Agent Problem
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 10: Economic Analysis of Financial Regulation
Asymmetric Information as a Rationale for Financial Regulation
Government Safety Net
Global The Spread of Government Deposit Insurance Throughout the World: Is This a Good Thing?
Drawbacks of the Government Safety Net
Types of Financial Regulation
Restrictions on Asset Holdings
Capital Requirements
Global Where Is the Basel Accord Heading After the Global Financial Crisis?
Prompt Corrective Action
Financial Supervision: Chartering and Examination
Assessment of Risk Management
Disclosure Requirements
Consumer Protection
Restrictions on Competition
Summary
Global International Financial Regulation
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 11: Banking Industry: Structure and Competition
Historical Development of the Banking System
Multiple Regulatory Agencies
Financial Innovation and the Growth of the “Shadow Banking System”
Responses to Changes in Demand Conditions: Interest-Rate Volatility
Responses to Changes in Supply Conditions: Information Technology
Securitization and the Shadow Banking System
Avoidance of Existing Regulations
FYI: Bruce Bent and the Money Market Mutual Fund Panic of 2008
Financial Innovation and the Decline of Traditional Banking
Structure of the U.S. Commercial Banking Industry
Restrictions on Branching
Response to Branching Restrictions
Bank Consolidation and Nationwide Banking
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
What Will the Structure of the U.S. Banking Industry Look Like in the Future?
Global Comparison of Banking Structure in the United States and Abroad
Are Bank Consolidation and Nationwide Banking Good Things?
Separation of Banking and Other Financial Service Industries
Erosion of Glass-Steagall
The Gramm-Leach-Bliley Financial Services Modernization Act of 1999: Repeal of Glass-Steagall
Implications for Financial Consolidation
Separation of Banking and Other Financial Services Industries Throughout the World
FYI: The Global Financial Crisis and the Demise of Large, Free-Standing Investment Banks
Thrift Industry: Regulation and Structure
Savings and Loan Associations
Mutual Savings Banks
Credit Unions
International Banking
Eurodollar Market
Global Ironic Birth of the Eurodollar Market
Structure of U.S. Banking Overseas
Foreign Banks in the United States
Summary
Key Terms
Questions
Data Analysis Problems
Web Exercises
Web References
Chapter 12: Financial Crises in Advanced Economies
Global The European Sovereign Debt Crisis
What Is a Financial Crisis?
Dynamics of Financial Crises
Stage One: Initial Phase
Stage Two: Banking Crisis
Stage Three: Debt Deflation
Application: The Mother of All Financial Crises: The Great Depression
The U.S. Stock Market Crash
Worldwide Decline in Asset Prices
Bank Failures
Economic Contraction and Debt Deflation
The Global Financial Crisis of 2007–2009
Causes of the 2007–2009 Financial Crisis
FYI: Collateralized Debt Obligations (CDOs) and Credit Default Swaps
Effects of the 2007–2009 Financial Crisis
Inside the Fed Was the Fed to Blame for the Housing Price Bubble?
Height of the 2007–2009 Financial Crisis
Government Intervention and the Recovery
Short-Term Responses and Recovery
Global Latvia’s Different and Controversial Response: Expansionary Contraction
Stabilizing the Global Financial System: Long-Term Responses
Global Financial Regulatory Framework
Policy Areas at the National Level
FYI: The Libor Scandal
Future Regulations and Policy Areas at the International Level
Bilateral and Multilateral Supervisory Cooperation
Collective Supervisory Cooperation
Collectively Coordinated Macroeconomic Stability Plans
Self-Discipline
Summary
Key Terms
Questions
Data Analysis Problems
Web Exercises
Chapter 13: Financial Crises in Emerging Economies
Dynamics of Financial Crises in Emerging Market Economies
Stage One: Initial Phase
Stage Two: Currency Crisis
Stage Three: Full-Fledged Financial Crisis
Application: Crisis in South Korea, 1997–1998
Financial Liberalization and Globalization Mismanaged
Perversion of the Financial Liberalization and Globalization Process: Chaebols and the South Korean Crisis
Stock Market Decline and Failure of Firms Increase Uncertainty
Adverse Selection and Moral Hazard Problems Worsen, and the Economy Contracts
Currency Crisis Ensues
Final Stage: Currency Crisis Triggers Full-Fledged Financial Crisis
Recovery Commences
Global China and the “Noncrisis” in 1997–1998
Application: The Argentine Financial Crisis, 2001–2002
Severe Fiscal Imbalances
Adverse Selection and Moral Hazard Problems Worsen
Bank Panic Begins
Currency Crisis Ensues
Currency Crisis Triggers Full-Fledged Financial Crisis
Recovery Begins
Global When an Advanced Economy Is Like an Emerging Market Economy: The Icelandic Financial Crisis of 2008
Preventing Emerging Market Financial Crises
Beef Up Prudential Regulation and Supervision of Banks
Encourage Disclosure and Market-Based Discipline
Limit Currency Mismatch
Sequence Financial Liberalization
Summary
Key Terms
Questions
Data Analysis Problems
Web References
Part 4: Central Banking and the Conduct of Monetary Policy
Chapter 14: Central Banks
Origins Of The Central Banking System
Variations in The Functions and Structures of Central Banks
The European Central Bank, the Euro System, and the European System of Central Banks
Global Who Should Own Central Banks?
Decision-making Bodies of the ECB
Global The Importance of the Bundesbank Within the ECB
How Monetary Policy Is Conducted Within the ECB
Global Are Non-Euro Central Banks Constrained by Membership In the EU?
The Federal Reserve System
Comparing the ECB and the Fed
The Bank of England
Global Brexit and the BoE
Structure of Central Banks in Larger Economies
Structure and Independence of Central Banks in Emerging Market Economies
Should Central Banks Be Independent
The Case for Independence
The Case Against Independence
The Trend Toward Greater Independence
Summary
Key Terms
Questions
Web Exercises
Chapter 15: The Money Supply Process
Three Players in the Money Supply Process
The Fed’s Balance Sheet
Liabilities
Assets
Control of the Monetary Base
Federal Reserve Open Market Operations
Shifts from Deposits into Currency
Loans to Financial Institutions
Other Factors That Affect the Monetary Base
Overview of the Fed’s Ability to Control the Monetary Base
Multiple Deposit Creation: A Simple Model
Deposit Creation: The Single Bank
Deposit Creation: The Banking System
Deriving the Formula for Multiple Deposit Creation
Critique of the Simple Model
Factors That Determine the Money Supply
Changes in the Nonborrowed Monetary Base, MBn
Changes in Borrowed Reserves, BR, from the Fed
Changes in the Required Reserve Ratio, rr
Changes in Excess Reserves
Changes in Currency Holdings
Overview of the Money Supply Process
The Money Multiplier
Deriving the Money Multiplier
Intuition Behind the Money Multiplier
Money Supply Response to Changes in the Factors
Application: Quantitative Easing and the Money Supply, 2007–2017
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 16: Tools of Monetary Policy
The Market for Reserves and the Federal Funds Rate
Demand and Supply in the Market for Reserves
How Changes in the Tools of Monetary Policy Affect the Federal Funds Rate
Application: How the Federal Reserve’s Operating Procedures Limit Fluctuations in the Federal Funds Rate
Conventional Monetary Policy Tools
Open Market Operations
Inside the Fed A Day at the Trading Desk
Discount Policy and the Lender of Last Resort
Inside the Fed Using Discount Policy to Prevent a Financial Panic
Reserve Requirements
Interest on Reserves
Relative Advantages of the Different Tools
Nonconventional Monetary Policy Tools and Quantitative Easing
Liquidity Provision
Large-Scale Asset Purchases
Inside the Fed Fed Lending Facilities During the Global Financial Crisis
Quantitative Easing Versus Credit Easing
Forward Guidance
Negative Interest Rates on Banks’ Deposits
Monetary Policy Tools of the European Central Bank
Open Market Operations
Lending to Banks
Interest on Reserves
Reserve Requirements
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 17: The Conduct of Monetary Policy: Strategy and Tactics
The Price Stability Goal and the Nominal Anchor
The Role of a Nominal Anchor
The Time-Inconsistency Problem
Other Goals of Monetary Policy
High Employment and Output Stability
Economic Growth
Stability of Financial Markets
Interest-Rate Stability
Stability in Foreign Exchange Markets
Should Price Stability Be the Primary Goal of Monetary Policy?
Hierarchical Versus Dual Mandates
Price Stability as the Primary, Long-Run Goal of Monetary Policy
Inflation Targeting
Inflation Targeting in New Zealand, Canada, and the United Kingdom
Advantages of Inflation Targeting
Disadvantages of Inflation Targeting
The Evolution of the Federal Reserve’s Monetary Policy Strategy
The Fed’s “Just Do It” Monetary Policy Strategy
The Long Road to Inflation Targeting
Inside the Fed Ben Bernanke’s Advocacy of Inflation Targeting
Global The European Central Bank’s Monetary Policy Strategy
Lessons for Monetary Policy Strategy from the Global Financial Crisis
Implications for Inflation Targeting
Should Central Banks Try to Stop Asset-Price Bubbles?
Two Types of Asset-Price Bubbles
The Debate Over Whether Central Banks Should Try to Pop Bubbles
Tactics: Choosing the Policy Instrument
Criteria for Choosing the Policy Instrument
Tactics: The Taylor Rule
Inside the Fed The Fed’s Use of the Taylor Rule
Inside the Fed Fed Watchers
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Part 5: International Finance and Monetary Policy
Chapter 18: The Foreign Exchange Market
Foreign Exchange Market
Following the Financial News Foreign Exchange Rates
What Are Foreign Exchange Rates?
Why Are Exchange Rates Important?
How Is Foreign Exchange Traded?
Exchange Rates in the Long Run
Theory of Purchasing Power Parity
Application: Burgernomics: Big Macs and PPP
Factors That Affect Exchange Rates in the Long Run
Exchange Rates in the Short Run: A Supply and Demand Analysis
Supply Curve for Domestic Assets
Demand Curve for Domestic Assets
Equilibrium in the Foreign Exchange Market
Explaining Changes in Exchange Rates
Shifts in the Demand for Domestic Assets
Recap: Factors That Change the Exchange Rate
Application: Effects of Changes in Interest Rates on the Equilibrium Exchange Rate
Application: The Global Financial Crisis and the Dollar
Application: Brexit and the British Pound
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Appendix to Chapter 18: The Interest Parity Condition
Comparing Expected Returns on Domestic and Foreign Assets
Interest Parity Condition
Chapter 19: The International Financial System
Intervention in the Foreign Exchange Market
Foreign Exchange Intervention and the Money Supply
Inside the Fed A Day at the Federal Reserve Bank of New York’s Foreign Exchange Desk
Unsterilized Intervention
Sterilized Intervention
Balance of Payments
Current Account
Financial Account
Global Should We Worry About the Large U.S. Current Account Deficit?
Exchange Rate Regimes in the International Financial System
Gold Standard
The Bretton Woods System
How a Fixed Exchange Rate Regime Works
Speculative Attacks
Application: The Foreign Exchange Crisis of September 1992
The Policy Trilemma
Application: How Did China Accumulate $4 Trillion of International Reserves?
Monetary Unions
Managed Float
Global Will the Euro Survive?
Capital Controls
Controls on Capital Outflows
Controls on Capital Inflows
The Role of the IMF
Should the IMF Act as an International Lender of Last Resort?
International Considerations and Monetary Policy
Direct Effects of the Foreign Exchange Market on Monetary Policy
Exchange Rate Considerations
To Peg or Not to Peg: Exchange-Rate Targeting as an Alternative Monetary Policy Strategy
Advantages of Exchange-Rate Targeting
Disadvantages of Exchange-Rate Targeting
When Is Exchange-Rate Targeting Desirable for Industrialized Countries?
When Is Exchange-Rate Targeting Desirable for Emerging Market Countries?
Currency Boards
Global Argentina’s Currency Board
Dollarization
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Part 6: Monetary Theory
Chapter 20: Quantity Theory, Inflation, and the Demand for Money
Quantity Theory of Money
Velocity of Money and Equation of Exchange
From the Equation of Exchange to the Quantity Theory of Money
Quantity Theory and the Price Level
Quantity Theory and Inflation
Application: Testing the Quantity Theory of Money
Budget Deficits and Inflation
Government Budget Constraint
Hyperinflation
Application: The Zimbabwean Hyperinflation
Keynesian Theories of Money Demand
Transactions Motive
Precautionary Motive
Speculative Motive
Putting the Three Motives Together
Portfolio Theories of Money Demand
Theory of Portfolio Choice and Keynesian Liquidity Preference
Other Factors That Affect the Demand for Money
Summary
Empirical Evidence for the Demand for Money
Interest Rates and Money Demand
Stability of Money Demand
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 21: The IS Curve
Planned Expenditure and Aggregate Demand
The Components of Aggregate Demand
Consumption Expenditure
FYI: Meaning of the Word Investment
Planned Investment Spending
Government Purchases and Taxes
Net Exports
Goods Market Equilibrium
Solving for Goods Market Equilibrium
Deriving the IS Curve
Understanding the IS Curve
What the IS Curve Tells Us: Intuition
What the IS Curve Tells Us: Numerical Example
Why the Economy Heads Toward Equilibrium
Factors that Shift the IS Curve
Changes in Government Purchases
Application: The Vietnam War Buildup, 1964–1969
Changes in Taxes
Application: The Fiscal Stimulus Package of 2009
Changes in Autonomous Spending
Changes in Financial Frictions
Summary of Factors That Shift the IS Curve
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 22: The Monetary Policy and Aggregate Demand Curves
The Federal Reserve and Monetary Policy
The Monetary Policy Curve
The Taylor Principle: Why the Monetary Policy Curve Has an Upward Slope
Shifts in the MP Curve
Movements Along Versus Shifts in the MP Curve…
Application: Movement Along the MP Curve: The Rise in the Federal Funds Rate Target, 2004–2006
Application: Shift in the MP Curve: Autonomous Monetary Easing at the Onset of the Global Financial Crisis
The Aggregate Demand Curve
Deriving the Aggregate Demand Curve Graphically
Factors That Shift the Aggregate Demand Curve
FYI: Deriving the Aggregate Demand Curve Algebraically
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 23: Aggregate Demand and Supply Analysis
Aggregate Demand
Following the Financial News Aggregate Output, Unemployment, and Inflation
Deriving the Aggregate Demand Curve
Factors That Shift the Aggregate Demand Curve
FYI: What Does Autonomous Mean?
Aggregate Supply
Long-Run Aggregate Supply Curve
Short-Run Aggregate Supply Curve
Price Stickiness and the Short-Run Aggregate Supply Curve
Shifts in the Aggregate Supply Curves
Shifts in the Long-Run Aggregate Supply Curve
Shifts in the Short-Run Aggregate Supply Curve
Equilibrium in Aggregate Demand and Supply Analysis
Short-Run Equilibrium
How the Short-Run Equilibrium Moves to the Long-Run Equilibrium over Time
Self-Correcting Mechanism
Changes in Equilibrium: Aggregate Demand Shocks
Application: The Volcker Disinflation, 1980–1986
Application: Negative Demand Shocks, 2001–2004
Changes in Equilibrium: Aggregate Supply (Inflation) Shocks
Temporary Supply Shocks
Application: Negative Supply Shocks, 1973–1975 and 1978–1980
Permanent Supply Shocks and Real Business Cycle Theory
Application: Positive Supply Shocks, 1995–1999
Conclusions
Application: Negative Supply and Demand Shocks and the 2007–2009 Financial Crisis
AD/AS Analysis of Foreign Business Cycle Episodes
Application: The United Kingdom and the 2007–2009 Financial Crisis
Application: China and the 2007–2009 Financial Crisis
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Appendix to Chapter 23: The Phillips Curve and the Short-Run Aggregate Supply Curve
The Phillips Curve
Phillips Curve Analysis in the 1960s
FYI: The Phillips Curve Trade-Off and Macroeconomic Policy in the 1960s
The Friedman-Phelps Phillips Curve Analysis
The Phillips Curve After the 1960s
The Modern Phillips Curve
The Modern Phillips Curve with Adaptive (Backward-Looking) Expectations
The Short-Run Aggregate Supply Curve
Chapter 24: Monetary Policy Theory
Response of Monetary Policy to Shocks
Response to an Aggregate Demand Shock
Response to a Permanent Supply Shock
Response to a Temporary Supply Shock
The Bottom Line: The Relationship Between Stabilizing Inflation and Stabilizing Economic Activity
How Actively Should Policymakers Try to Stabilize Economic Activity?
Lags and Policy Implementation
Inflation: Always and Everywhere a Monetary Phenomenon
FYI: The Activist/Nonactivist Debate Over the Obama Fiscal Stimulus Package
Causes of Inflationary Monetary Policy
High Employment Targets and Inflation
Application: The Great Inflation
Monetary Policy at the Zero Lower Bound
Deriving the Aggregate Demand Curve with the Zero Lower Bound
The Disappearance of the Self-Correcting Mechanism at the Zero Lower Bound
Application: Nonconventional Monetary Policy and Quantitative Easing
Liquidity Provision
Asset Purchases and Quantitative Easing
Management of Expectations
Application: Abenomics and the Shift in Japanese Monetary Policy in 2013
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Chapter 25: The Role of Expectations in Monetary Policy
Lucas Critique of Policy Evaluation
Econometric Policy Evaluation
Application: The Term Structure of Interest Rates
Policy Conduct: Rules or Discretion?
Discretion and the Time-Inconsistency Problem
Types of Rules
The Case for Rules
FYI: The Political Business Cycle and Richard Nixon
The Case for Discretion
Constrained Discretion
Global The Demise of Monetary Targeting in Switzerland
The Role of Credibility and a Nominal Anchor
Benefits of a Credible Nominal Anchor
Credibility and Aggregate Demand Shocks
Credibility and Aggregate Supply Shocks
Application: A Tale of Three Oil Price Shocks
Credibility and Anti-Inflation Policy
Global Ending the Bolivian Hyperinflation: A Successful Anti-Inflation Program
Application: Credibility and the Reagan Budget Deficits
Approaches to Establishing Central Bank Credibility
Nominal GDP Targeting
Inside the Fed The Appointment of Paul Volcker, Anti-Inflation Hawk
Appoint “Conservative” Central Bankers
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Chapter 26: Transmission Mechanisms of Monetary Policy
Transmission Mechanisms of Monetary Policy
Traditional Interest-Rate Channels
Other Asset Price Channels
Credit View
FYI: Consumers’ Balance Sheets and the Great Depression
Why Are Credit Channels Likely to Be Important?
Application: The Great Recession
Lessons for Monetary Policy
Application: Applying the Monetary Policy Lessons to Japan’s Two Lost Decades
Summary
Key Terms
Questions
Applied Problems
Data Analysis Problems
Web Exercises
Web References
Glossary
Index
Back Cover

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