The breakthrough text that closes the gap between economic theory and the day-to-day behaviour of banks and financial markets. Working from a macro framework based on the Fed's use of interest rate, Ball presents the core concepts necessary to understand the problems of the stock market and the causes of recessions and banking crises

Part I. Foundations.- 1. The Financial System.- 2. Money and Central Banks.- Part II. Financial Markets.- 3. Asset Prices and Interest Rates.- 4. What determines Interest Rates?.- 5. Securities Markets.- 6. Foreign Exchange Markets.- Part III. Banking.- 7. Asymmetric Information in the Financial System.- 8. The Banking Industry.- 9. The Business of Banking.- 10. Bank Regulation.- Part IV. Money and the Economy.- 11. The Money Supply and Interest Rates.- 12. Short-Run Economic Fluctuations.- 13. Economic Fluctuations, Monetary Policy and the Financial System.- 14. Inflation and Deflation.- Part V. Monetary Policy.- 15. Policies for Economic Stability.- 16. Monetary Institutions and Strategies.- 17. Monetary Policy and Exchange Rates.- 18. Financial Crises.

Working from a macro framework based on the Fed's use of interest rate as its major policy instrument, Ball presents the core concepts necessary to understand the problems affecting the stock market, and the causes of recessions and banking crises.  Underlying this framework are the intellectual foundations for the Fed's inflation targeting using the dynamic consistency problem facing policymakers.    

Over 90 case studies, which tie economic theory to practical issues, looking from the point of view of financial firms, aggregate economics, economic policymakers and individuals confronting the financial system A focus on core concepts and theories, which makes for a streamlined text that is shorter than typical money and banking textbooks The book has a thoroughly applied approach, which explains the core ideas of economic theory in a simple, but rigorous, fashion and applies them directly to real world issues A chapter focussing on financial crises that covers not just the US Financial Crisis 20072009, but also crises in emerging economies, such as the financial crisis of 20012002 in Argentina Full colour layout with excellent pedagogical features, such as explanations of key terms, illustrative graphs and diagrams, end of chapter questions and problems, and online and data questions