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The economics of money, banking, and financial markets / Frederic S. Mishkin.
Author
Mishkin, Frederic S.
[Browse]
Format
Book
Language
English
Εdition
7th ed. update.
Published/Created
Boston : Pearson/Addison-Wesley, ©2006.
Description
1 volume (various pagings) : illustrations (some color), color map ; 27 cm
Availability
Copies in the Library
Location
Call Number
Status
Location Service
Notes
Engineering Library - Stacks
HG173 .M632 2006
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Firestone Library - Stacks
HG173 .M632 2006
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Forrestal Annex - Reserve
HG173 .M632 2006
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Details
Subject(s)
Finance
[Browse]
Money
[Browse]
Banks and banking
[Browse]
Silver
[Browse]
Series
Addison-Wesley series in economics
[More in this series]
Notes
A multimedia package, including a web site, is available to supplement the text.
Bibliographic references
Includes bibliographical references and index.
Contents
Machine derived contents note: Introduction 1
1 Why Study Money, Banking, and Financial Markets? 3
2 An Overview of the Financial System 23
3 What Is Money? 44
Financial Markets 59
4 Understanding Interest Rates 61
5 The Behavior of Interest Rates 85
6 The Risk and Term Structure of Interest Rates 120
7 The Stock Market, the Theory of Rational Expectations,
and the Efficient Market Hypothesis 141
Financial Institutions 167
8 An Economic Analysis of Financial Structure 169
9 Banking and the Management of Financial Institutions 201
10 Banking Industry: Structure and Competition 229
11 Economic Analysis of Banking Regulation 260
12 Nonbank Finance 287
13 Financial Derivatives 309
Central Banking and the Conduct of
Monetary Policy 333
14 Structure of Central Banks and the Federal Reserve System 335
15 Multiple Deposit Creation and the Money Supply Process 357
16 Determinants of the Money Supply 374
17 Tools of Monetary Policy 393
18 Conduct of Monetary Policy: Goals and Targets 411
International Finance and Monetary Policy 433
19 The Foreign Exchange Market 435
20 The International Financial System 462
21 Monetary Policy Strategy: The International Experience 487
Monetary Theory 515
22 The Demand for Money 517
23 The Keynesian Framework and the ISLM Model 536
24 Monetary and Fiscal Policy in the ISLM Model 561
25 Aggregate Demand and Supply Analysis 582
26 Transmission Mechanisms of Monetary Policy: The Evidence 603
27 Money and Inflation 632
28 Rational Expectations: Implications for Policy 658
Introduction 1
Chapter 1
Why Study Money, Banking, and Financial Markets? 3
Preview 3
Why Study Financial Markets? 3
The Bond Market and Interest Rates 3
The Stock Market 5
The Foreign Exchange Market 5
Why Study Banking and Financial Institutions? 7
Structure of the Financial System 7
Banks and Other Financial Institutions 8
Financial Innovation 8
Why Study Money and Monetary Policy? 8
Money and Business Cycles 9
Money and Inflation 10
Money and Interest Rates 12
Conduct of Monetary Policy 12
Fiscal Policy and Monetary Policy 12
How We Will Study Money, Banking, and Financial Markets 13
Exploring the Web 14
Concluding Remarks 17
Summary, Key Terms, Questions and Problems, and Web Exercises 17
Appendix to Chapter 1
Defining Aggregate Output, Income, the Price Level,
and the Inflation Rate 20
Aggregate Output and Income 20
Real Versus Nominal Magnitudes 20
Aggregate Price Level 21
Growth Rates and the Inflation Rate 22
Chapter 2
An Overview of the Financial System 23
Preview 23
Function of Financial Markets 23
Structure of Financial Markets 25
Debt and Equity Markets 25
Primary and Secondary Markets 26
Exchanges and Over-the-Counter Markets 27
Money and Capital Markets 27
Internationalization of Financial Markets 28
International Bond Market, Eurobonds, and Eurocurrencies 28
World Stock Markets 29
Function of Financial Intermediaries 29
Transaction Costs 29
Following the Financial News Foreign Stock Market Indexes 30
Box 1 Global: The Importance of Financial Intermediaries to Securities
Markets: An International Comparison 31
Risk Sharing 31
Asymmetric Information: Adverse Selection and Moral Hazard 32
Financial Intermediaries 34
Depository Institutions 34
Contractual Savings Institutions 35
Investment Intermediaries 37
Regulation of the Financial System 37
Increasing Information Available to Investors 39
Ensuring the Soundness of Financial Intermediaries 39
Financial Regulation Abroad 40
Summary, Key Terms, Questions and Problems, and Web Exercises 41
Chapter 3
What Is Money? 44
Preview 44
Meaning of Money 44
Functions of Money 45
Medium of Exchange 45
Unit of Account 46
Store of Value 47
Evolution of the Payments System 48
Commodity Money 48
Fiat Money 48
Checks 48
Box 1 Global: Birth of the Euro: Will It Benefit Europe? 49
Electronic Payment 50
Box 2 E-Finance: Why Are Scandinavians So Far Ahead of Americans in
Using Electronic Payments? 50
E-Money 51
Measuring Money 51
The Federal Reserve's Monetary Aggregates 51
Box 3 E-Finance: Are We Headed for a Cashless Society? 52
Following the Financial News The Monetary Aggregates 54
How Reliable Are the Money Data? 55
Summary, Key Terms, Questions and Problems, and Web Exercises 56
Chapter 4
Understanding Interest Rates 61
Preview 61
Measuring Interest Rates 61
Present Value 61
Four Types of Credit Market Instruments 63
Yield to Maturity 64
Box 1 Global: Negative T-Bill Rates? Japan Shows the Way 69
Other Measures of Interest Rates 69
Current Yield 70
Yield on a Discount Basis 71
Application Reading the Wall Street Journal: The Bond Page 72
Following the Financial News Bond Prices and Interest Rates 73
The Distinction Between Interest Rates and Returns 75
Maturity and the Volatility of Bond Returns: Interest-Rate Risk 78
Box 2 Helping Investors to Select Desired Interest-Rate Risk 79
Summary 79
The Distinction Between Real and Nominal Interest Rates 79
Box 3 With TIPS, Real Interest Rates Have Become Observable in the
United States 82
Summary, Key Terms, Questions and Problems, and Web Exercises 82
Chapter 5
The Behavior of Interest Rates 85
Preview 85
Determinants of Asset Demand 85
Wealth 86
Expected Returns 86
Risk 87
Liquidity 87
Theory of Asset Demand 87
Supply and Demand in the Bond Market 87
Demand Curve 88
Supply Curve 90
Market Equilibrium 90
Supply and Demand Analysis 91
Loanable Funds Framework 91
Changes in Equilibrium Interest Rates 93
Shifts in the Demand for Bonds 93
Shifts in the Supply of Bonds 97
Application Changes in the Equilibrium Interest Rate Due to Expected
Inflation or Business Cycle Expansions 99
Changes in Expected Inflation: The Fisher Effect 99
Business Cycle Expansion 100
Application Explaining Low Japanese Interest Rates 103
Application Reading the Wall Street Journal "Credit Markets" Column 103
Following the Financial News The "Credit Markets" Column 104
Supply and Demand in the Market for Money: The Liquidity
Preference Framework 105
Changes in Equilibrium Interest Rates in the Liquidity Reference Framework 107
Shifts in the Demand for Money 107
Shifts in the Supply of Money 108
Application Changes in the Equilibrium Interest Rate Due to Changes
in Income, the Price Level, or the Money Supply 108
Changes in Income 108
Changes in the Price Level 108
Changes in the Money Supply 109
Following the Financial News Forecasting Interest Rates 111
Application Money and Interest Rates 112
Does a Higher Rate of Growth of the Money Supply Lower Interest Rates? 114
Summary, Key Terms, Questions and Problems, and Web Exercises 117
Chapter 6
The Risk and Term Structure of Interest Rates 120
Preview 120
Risk Structure of Interest Rates 120
Default Risk 120
Application The Enron Bankruptcy and the Baa-Aaa Spread 124
Liquidity 125
Income Tax Considerations 125
Summary 127
Application Effects of the Bush Tax Cut on Bond Interest Rates 127
Term Structure of Interest Rates 127
Following the Financial News Yield Curves 128
Expectations Theory 129
Segmented Markets Theory 132
Liquidity Premium and Preferred Habitat Theories 133
Evidence on the Term Structure 136
Summary 137
Application Interpreting Yield Curves, 1980/2003 137
Summary, Key Terms, Questions and Problems, and Web Exercises 138
Chapter 7
The Stock Market, the Theory of Rational Expectations,
Preview 141
Computing the Price of Common Stock 141
The One-Period Valuation Model 142
The Generalized Dividend Valuation Model 143
The Gordon Growth Model 143
How the Market Sets Security Prices 144
Application Monetary Policy and Stock Prices 146
Application The September 11 Terrorist Attacks, the Enron Scandal,
and the Stock Market 146
The Theory of Rational Expectations 147
Formal Statement of the Theory 148
Rationale Behind the Theory 149
Implications of the Theory 149
The Efficient Markets Hypothesis: Rational Expectations in Financial Markets 150
Rationale Behind the Hypothesis 151
Stronger Version of the Efficient Market Hypothesis 152
Evidence on the Efficient Market Hypothesis 153
Evidence in Favor of Market Efficiency 153
Application Should Foreign Exchange Rates Follow a Random Walk? 155
Evidence Against Market Efficiency 156
Overview of the Evidence on the Efficient Market Hypothesis 158
Application Practical Guide to Investing in the Stock Market 158
How Valuable Are Published Reports by Investment Advisers? 158
Following the Financial News Stock Prices 159
Box 1 Should You Hire an Ape as Your Investment Adviser? 160
Should You Be Skeptical of Hot Tips? 160
Do Stock Prices Always Rise When There Is Good News? 161
Efficient Market Prescription for the Investor 161
Evidence on Rational Expectations in Other Markets 162
Application What Do the Black Monday Crash of 1987 and the Tech
Crash of 2000 Tell Us About Rational Expectations and Efficient Markets? 163
Summary, Key Terms.
Show 226 more Contents items
ISBN
0321357949
9780321357946
0321331850
9780321331854
032137312X ((pbk.))
9780321373120 ((pbk.))
0321197631 ((student access kit))
9780321197634 ((student access kit))
LCCN
2005015973
OCLC
60558815
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