| Contents | |
| Notes to the Instructor | |
| Acknowledgements | |
| About the Authors | |
| Ch. 1 | Introducing Money, Banking, and Financial Markets | 3 |
| Ch. 2 | The Role of Money in the Macroeconomy | 6 |
| Ch. 3 | Financial Instruments, Markets, and Institutions | 23 |
| Ch. 4 | Interest Rate Measurement and Behavior | 43 |
| Ch. 5 | The Risk and Term Structure of Interest Rates | 66 |
| Ch. 6 | The Structure and Performance of Securities Markets | 83 |
| Ch. 7 | The Pricing of Risky Financial Assets | 98 |
| Ch. 8 | Money and Capital Markets | 109 |
| Ch. 9 | Demystifying Derivatives | 137 |
| Ch. 10 | Understanding Foreign Exchange | 159 |
| Ch. 11 | The Nature of Financial Intermediation | 179 |
| Ch. 12 | Depository Financial Institutions | 199 |
| Ch. 13 | Nondepository Financial Institutions | 225 |
| Ch. 14 | Understanding Financial Contracts | 243 |
| Ch. 15 | The Regulation of Markets and Institutions | 265 |
| Ch. 16 | Financial System Design | 285 |
| Ch. 17 | Financial Innovation | 303 |
| Ch. 18 | Who's in Charge Here? | 315 |
| Ch. 19 | Bank Reserves and the Money Supply | 326 |
| Ch. 20 | The Instruments of Central Banking | 347 |
| Ch. 21 | Understanding Movements in Bank Reserves | 362 |
| Ch. 22 | Monetary Policy Strategy | 383 |
| Ch. 23 | The Classical Foundations | 399 |
| Ch. 24 | The Keynesian Framework | 421 |
| Ch. 25 | The ISLM World | 452 |
| Ch. 26 | Money and Economic Stability in the ISLM World | 486 |
| Ch. 27 | An Aggregate Supply and Demand Perspective on Money and Economic Stability | 501 |
| Ch. 28 | Rational Expectations: Theory and Policy Implications | 531 |
| Ch. 29 | Empirical Evidence on the Effectiveness of Monetary Policy | 531 |
| Ch. 30 | Tying It All Together | 547 |
| Epilogue: Careers in Banking and Financial Markets | 559 |
| Glossary | 565 |
| Index | 583 |