Cookies help us deliver our services. By using our services, you agree to our use of cookies. Learn more
Skip to content
Cover of Money and Banking v2.0
Published: 
March 2012
Page Count: 
320
ISBN (Digital): 
978-1-4533-4379-1

Money and Banking

Version 2.0
By Robert E. Wright

Included Supplements

Key Features

Teach Money & Banking? Adopt this college textbook as is or personalize it online at Flat World. Change chapter titles, move content with ease, and delight in how much less your students pay. We publish peer-reviewed textbooks by expert authors. You make them perfect for your course.

Students

Buy This Book Redeem My Code

Listen to a podcast here of Robert discussing his textbook and gain perspective on why he wrote a Money and Banking text.

The financial crisis of 2007-8 has already revolutionized institutions, markets, and regulation. Wright's Money and Banking V 2.0 captures those revolutionary changes and packages them in a way that engages undergraduates enrolled in Money and Banking and Financial Institutions and Markets courses.

Minimal mathematics, accessible language, and a student-oriented tone ease readers into complex subjects like money, interest rates, banking, asymmetric information, financial crises and regulation, monetary policy, monetary theory, and other standard topics. Numerous short cases, called "Stop and Think" boxes, promote internalization over memorization. Exercise drills ensure basic skills competency where appropriate. Short, snappy sections that begin with a framing question enhance readability and encourage assignment completion.

The 2.0 version of this text boasts substantive revisions (additions, deletions, rearrangements) of almost every chapter based on the suggestions of many Money and Banking instructors.

Some specific highlights are: Chapter 11 now contains enhanced descriptions of recent regulatory changes, including Dodd-Frank, Chapter 12 is an entirely new chapter on derivatives covering forwards, futures, options, and swaps that also including comprehensive treatment of the causes and consequences of financial crises, and Chapter 14 has updated discussions of the Federal Reserve’s monetary policy tools, including paying interest on reserves, and the structure and leadership of the European Central Bank.

Recent financial turmoil has increased student interest in the financial system but simultaneously threatens to create false impressions and negative attitudes. This up-to-date text by a dynamic, young author encourages students to critique the financial system without rejecting its many positive attributes. Peruse the book online now to see for yourself if this book fits the needs of your course and students.

  • About the Author
  • Acknowledgments
  • Preface

    • Chapter 1: Money, Banking, and Your World

  • 1.1 Dreams Dashed
  • 1.2 Hope Springs
  • 1.3 Suggested Browsing
  • 1.4 Suggested Reading

    • Chapter 2: The Financial System

  • 2.1 Evil and Brilliant Financiers?
  • 2.2 Financial Systems
  • 2.3 Asymmetric Information: The Real Evil
  • 2.4 Financial Instruments
  • 2.5 Financial Markets
  • 2.6 Financial Intermediaries
  • 2.7 Competition Between Markets and Intermediaries
  • 2.8 Regulation
  • 2.9 Suggested Reading

    • Chapter 3: Money

  • 3.1 Of Love, Money, and Transactional Efficiency
  • 3.2 Better to Have Had Money and Lost It Than to Have Never Had Money at All
  • 3.3 A Short History of Moolah
  • 3.4 Commodity and Credit Monies
  • 3.5 Measuring Money
  • 3.6 Suggested Reading

    • Chapter 4: Interest Rates

  • 4.1 The Interest of Interest
  • 4.2 Present and Future Value
  • 4.3 Compounding Periods
  • 4.4 Pricing Debt Instruments
  • 4.5 What’s the Yield on That?
  • 4.6 Calculating Returns
  • 4.7 Inflation and Interest Rates
  • 4.8 Suggested Reading

    • Chapter 5: The Economics of Interest-Rate Fluctuations

  • 5.1 Interest Rate Fluctuations
  • 5.2 Shifts in Supply and Demand for Bonds
  • 5.3 Predictions and Effects
  • 5.4 Suggested Reading

    • Chapter 6: The Economics of Interest-Rate Spreads and Yield Curves

  • 6.1 Interest-Rate Determinants I: The Risk Structure
  • 6.2 The Determinants of Interest Rates II: The Term Structure
  • 6.3 Suggested Reading

    • Chapter 7: Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities

  • 7.1 The Theory of Rational Expectations
  • 7.2 Valuing Corporate Equities
  • 7.3 Financial Market Efficiency
  • 7.4 Evidence of Market Efficiency
  • 7.5 Suggested Reading

    • Chapter 8: Financial Structure, Transaction Costs, and Asymmetric Information

  • 8.1 The Sources of External Finance
  • 8.2 Transaction Costs, Asymmetric Information, and the Free-Rider Problem
  • 8.3 Adverse Selection
  • 8.4 Moral Hazard
  • 8.5 Agency Problems
  • 8.6 Suggested Reading

    • Chapter 9: Bank Management

  • 9.1 The Balance Sheet
  • 9.2 Assets, Liabilities, and T-Accounts
  • 9.3 Bank Management Principles
  • 9.4 Credit Risk
  • 9.5 Interest-Rate Risk
  • 9.6 Off the Balance Sheet
  • 9.7 Suggested Reading

    • Chapter 10: Innovation and Structure in Banking and Finance

  • 10.1 Early Financial Innovations
  • 10.2 Innovations Galore
  • 10.3 Loophole Mining and Lobbying
  • 10.4 Banking on Technology
  • 10.5 Banking Industry Profitability and Structure
  • 10.6 Suggested Reading

    • Chapter 11: The Economics of Financial Regulation

  • 11.1 Market Failures and Public Choice
  • 11.2 The Great Depression as Regulatory Failure
  • 11.3 The Savings and Loan Regulatory Debacle
  • 11.4 Better but Still Not Good: U.S. Regulatory Reforms
  • 11.5 Basel II, Basel III, and Dodd-Frank
  • 11.6 Suggested Reading

    • Chapter 12: Financial Derivatives

  • 12.1 Derivatives and Their Functions
  • 12.2 Forwards and Futures
  • 12.3 Options and Swaps
  • 12.4 Suggested Reading

    • Chapter 13: Financial Crises: Causes and Consequences

  • 13.1 Financial Crisis Taxonomies
  • 13.2 Asset Bubbles
  • 13.3 Financial Panics
  • 13.4 Lender of Last Resort (LLR)
  • 13.5 Bailouts and Resolutions
  • 13.6 The Crisis of 2007-2009
  • 13.7 Suggested Reading

    • Chapter 14: Central Bank Form and Function

  • 14.1 America’s Central Banks
  • 14.2 The Federal Reserve System’s Structure
  • 14.3 Other Important Central Banks
  • 14.4 Central Bank Independence
  • 14.5 Suggested Reading

    • Chapter 15: The Money Supply Process and the Money Multipliers

  • 15.1 The Central Bank’s Balance Sheet
  • 15.2 Open Market Operations
  • 15.3 A Simple Model of Multiple Deposit Creation
  • 15.4 A More Sophisticated Money Multiplier for M1
  • 15.5 The M2 Money Multiplier
  • 15.6 Summary and Explanation
  • 15.7 Suggested Reading

    • Chapter 16: Monetary Policy Tools

  • 16.1 The Federal Funds Market and Reserves
  • 16.2 Open Market Operations and the Discount Window
  • 16.3 The Monetary Policy Tools of Other Central Banks
  • 16.4 Suggested Reading

    • Chapter 17: Monetary Policy Targets and Goals

  • 17.1 A Short History of Fed Blunders
  • 17.2 Central Bank Goal Trade-offs
  • 17.3 Central Bank Targets
  • 17.4 The Taylor Rule
  • 17.5 Suggested Reading

    • Chapter 18: Foreign Exchange

  • 18.1 The Economic Importance of Currency Markets
  • 18.2 Determining the Exchange Rate
  • 18.3 Long-Run Determinants of Exchange Rates
  • 18.4 Short-Run Determinants of Exchange Rates
  • 18.5 Modeling the Market for Foreign Exchange
  • 18.6 Suggested Reading

    • Chapter 19: International Monetary Regimes

  • 19.1 The Trilemma, or Impossible Trinity
  • 19.2 Two Systems of Fixed Exchange Rates
  • 19.3 The Managed or Dirty Float
  • 19.4 The Choice of International Policy Regime
  • 19.5 Suggested Reading

    • Chapter 20: Money Demand

  • 20.1 The Simple Quantity Theory and the Liquidity Preference Theory of Keynes
  • 20.2 Friedman’s Modern Quantity Theory of Money
  • 20.3 The Policy Failure of the Modern Quantity Theory of Money
  • 20.4 Suggested Reading

    • Chapter 21: IS-LM

  • 21.1 Aggregate Output and Keynesian Cross Diagrams
  • 21.2 The IS-LM Model
  • 21.3 Suggested Reading

    • Chapter 22: IS-LM in Action

  • 22.1 Shifting Curves: Causes and Effects
  • 22.2 Implications for Monetary Policy
  • 22.3 Aggregate Demand Curve
  • 22.4 Suggested Reading

    • Chapter 23: Aggregate Supply and Demand and the Growth Diamond

  • 23.1 Aggregate Demand
  • 23.2 Aggregate Supply
  • 23.3 Equilibrium Analysis
  • 23.4 The Growth Diamond
  • 23.5 Suggested Reading

    • Chapter 24: Monetary Policy Transmission Mechanisms

  • 24.1 Modeling Reality
  • 24.2 How Important Is Monetary Policy?
  • 24.3 Transmission Mechanisms
  • 24.4 Suggested Reading

    • Chapter 25: Inflation and Money

  • 25.1 Empirical Evidence of a Money-Inflation Link
  • 25.2 Why Have Central Bankers So Often Gotten It Wrong?
  • 25.3 Suggested Reading

    • Chapter 26: Rational Expectations Redux: Monetary Policy Implications

  • 26.1 Rational Expectations
  • 26.2 New Keynesians
  • 26.3 Inflation Busting
  • 26.4 Suggested Reading
    • Instructor’s Manual

    Instructor’s Manual

    The Instructor’s Manual guides you through the main concepts of each chapter and important elements such as learning objectives, key terms, and key takeaways. Can include answers to chapter exercises, group activity suggestions, and discussion questions.

    Instructor’s Manual

    PowerPoint Lecture Notes

    PowerPoint Lecture Notes

    A PowerPoint presentation highlighting key learning objectives and the main concepts for each chapter are available for you to use in your classroom. You can either cut and paste sections or use the presentation as a whole.

    PowerPoint Lecture Notes

    Test Generator

    Test Generator

    Prefer printable tests? Download our test generator and start creating printable tests today! We offer a test generator for both PC and Mac users.

    Test Bank Files for Import to Learning Management Systems

    Test Bank Files for Import to Learning Management Systems

    For your convenience, we've packaged our test items for easy import into Learning Management Systems like Blackboard, Brightspace/D2L, Canvas, Moodle, or Respondus.

    Test Item File

    Test Item File

    Need assistance in supplementing your quizzes and tests? Our test-item files (in Word format) contain many multiple-choice, fill-in-the-blank, and short-answer questions.

    At FlatWorld, we take pride in providing a range of high-quality supplements alongside our titles, to help instructors teach effectively. Supplements are available for instructors who have registered their adoption with us. If you need to review or preview something specific, please contact us.


    Sign up for FlatWorld

    Already registered? Sign in here

    Robert E. Wright Augustana College

    Robert E. Wright accepted the Nef Family Chair of Political Economy at Augustana University in 2009 after a decade of teaching economics at the University of Virginia and New York University’s Stern School. He received his Ph.D. in Economic History from SUNY, Buffalo and is the co-author and co-editor of almost forty books, including Wall Street Journal’s Guide to the 50 Economic Indicators and Guide to the U.S. Economic Policy.
    Back to top