Money and Banking by Robert E. Wright and Vincenzo Quadrini

  • Description
  • Table of Contents
  • About the Authors
  • Supplements
Publication Date: Apr 2009
License: Creative Commons
ISBN 10: 0-9820430-8-2
ISBN 13: 978-0-9820430-8-0

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 and Quadrini's Money and Banking 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.

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 authorial team encourages students to critique the financial system without rejecting its many positive attributes.

  • About the Authors
  • Acknowledgments
  • Preface
  • Chapter 1: Money, Banking, and Your World
    • Section 1: Dreams Dashed
    • Section 2: Hope Springs
    • Section 3: Suggested Browsing
    • Section 4: Suggested Reading
  • Chapter 2: The Financial System
    • Section 1: Evil and Brilliant Financiers?
    • Section 2: Financial Systems
    • Section 3: Asymmetric Information, the Real Evil
    • Section 4: Financial Markets
    • Section 5: Financial Intermediaries
    • Section 6: Competition Between Markets and Intermediaries
    • Section 7: Regulation
    • Section 8: Suggested Reading
  • Chapter 3: Money
    • Section 1: Of Love, Money, and Transactional Efficiency
    • Section 2: Better to Have Had Money and Lost It Than to Have Never Had Money at All
    • Section 3: A Short History of Moolah
    • Section 4: Commodity and Credit Monies
    • Section 5: Measuring Money
    • Section 6: Suggested Reading
  • Chapter 4: Interest Rates
    • Section 1: The Interest of Interest
    • Section 2: Present and Future Value
    • Section 3: Compounding Periods
    • Section 4: Pricing Debt Instruments
    • Section 5: What’s the Yield on That?
    • Section 6: Calculating Returns
    • Section 7: Inflation and Interest Rates
    • Section 8: Suggested Reading
  • Chapter 5: The Economics of Interest-Rate Fluctuations
    • Section 1: Interest Rate Fluctuations
    • Section 2: Shifts in Supply and Demand for Bonds
    • Section 3: Liquidity Preference
    • Section 4: Predictions and Effects
    • Section 5: Suggested Reading
  • Chapter 6: The Economics of Interest-Rate Spreads and Yield Curves
    • Section 1: A Short History of Interest Rates
    • Section 2: Interest-Rate Determinants I: The Risk Structure
    • Section 3: The Determinants of Interest Rates II: The Term Structure
    • Section 4: Suggested Reading
  • Chapter 7: Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities
    • Section 1: The Theory of Rational Expectations
    • Section 2: Valuing Corporate Equities
    • Section 3: Financial Market Efficiency
    • Section 4: Evidence of Market Efficiency
    • Section 5: Suggested Reading
  • Chapter 8: Financial Structure, Transaction Costs, and Asymmetric Information
    • Section 1: The Sources of External Finance
    • Section 2: Transaction Costs, Asymmetric Information, and the Free-Rider Problem
    • Section 3: Adverse Selection
    • Section 4: Moral Hazard
    • Section 5: Agency Problems
    • Section 6: Suggested Reading
  • Chapter 9: Bank Management
    • Section 1: The Balance Sheet
    • Section 2: Assets, Liabilities, and T-Accounts
    • Section 3: Bank Management Principles
    • Section 4: Credit Risk
    • Section 5: Interest-Rate Risk
    • Section 6: Off the Balance Sheet
    • Section 7: Suggested Reading
  • Chapter 10: Innovation and Structure in Banking and Finance
    • Section 1: Early Financial Innovations
    • Section 2: Innovations Galore
    • Section 3: Loophole Mining and Lobbying
    • Section 4: Banking on Technology
    • Section 5: Banking Industry Profitability and Structure
    • Section 6: Suggested Reading
  • Chapter 11: The Economics of Financial Regulation
    • Section 1: Public Interest Versus Private Interest
    • Section 2: The Great Depression as Regulatory Failure
    • Section 3: The Savings and Loan Regulatory Debacle
    • Section 4: Better but Still Not Good: U.S. Regulatory Reforms
    • Section 5: Basel II’s Third Pillar
    • Section 6: Suggested Reading
  • Chapter 12: The Financial Crisis of 2007–2008
    • Section 1: Financial Crises
    • Section 2: Asset Bubbles
    • Section 3: Financial Panics
    • Section 4: Lender of Last Resort
    • Section 5: Bailouts
    • Section 6: The Crisis of 2007–2008
    • Section 7: Suggested Reading
  • Chapter 13: Central Bank Form and Function
    • Section 1: America’s Central Banks
    • Section 2: The Federal Reserve System’s Structure
    • Section 3: Other Important Central Banks
    • Section 4: Central Bank Independence
    • Section 5: Suggested Reading
  • Chapter 14: The Money Supply Process
    • Section 1: The Central Bank’s Balance Sheet
    • Section 2: Open Market Operations
    • Section 3: A Simple Model of Multiple Deposit Creation
    • Section 4: Suggested Reading
  • Chapter 15: The Money Supply and the Money Multiplier
    • Section 1: A More Sophisticated Money Multiplier for M1
    • Section 2: The M2 Money Multiplier
    • Section 3: Summary and Explanation
    • Section 4: Suggested Reading
  • Chapter 16: Monetary Policy Tools
    • Section 1: The Federal Funds Market and Reserves
    • Section 2: Open Market Operations and the Discount Window
    • Section 3: The Monetary Policy Tools of Other Central Banks
    • Section 4: Suggested Reading
  • Chapter 17: Monetary Policy Targets and Goals
    • Section 1: A Short History of Fed Blunders
    • Section 2: Central Bank Goal Tradeoffs
    • Section 3: Central Bank Targets
    • Section 4: The Taylor Rule
    • Section 5: Suggested Reading
  • Chapter 18: Foreign Exchange
    • Section 1: The Economic Importance of Currency Markets
    • Section 2: Determining the Exchange Rate
    • Section 3: Long-Run Determinants of Exchange Rates
    • Section 4: Short-Run Determinants of Exchange Rates
    • Section 5: Modeling the Market for Foreign Exchange
    • Section 6: Suggested Reading
  • Chapter 19: International Monetary Regimes
    • Section 1: The Trilemma, or Impossible Trinity
    • Section 2: Two Systems of Fixed Exchange Rates
    • Section 3: The Managed or Dirty Float
    • Section 4: The Choice of International Policy Regime
    • Section 5: Suggested Reading
  • Chapter 20: Money Demand
    • Section 1: The Quantity Theory
    • Section 2: Liquidity Preference Theory
    • Section 3: Head to Head: Friedman Versus Keynes
    • Section 4: Suggested Reading
  • Chapter 21: IS-LM
    • Section 1: Aggregate Output and Keynesian Cross Diagrams
    • Section 2: The IS-LM Model
    • Section 3: Suggested Reading
  • Chapter 22: IS-LM in Action
    • Section 1: Shifting Curves: Causes and Effects
    • Section 2: Implications for Monetary Policy
    • Section 3: Aggregate Demand Curve
    • Section 4: Suggested Reading
  • Chapter 23: Aggregate Supply and Demand, the Growth Diamond, and Financial Shocks
    • Section 1: Aggregate Demand
    • Section 2: Aggregate Supply
    • Section 3: Equilibrium Analysis
    • Section 4: The Growth Diamond
    • Section 5: Financial Shocks
    • Section 6: Suggested Reading
  • Chapter 24: Monetary Policy Transmission Mechanisms
    • Section 1: Modeling Reality
    • Section 2: How Important Is Monetary Policy?
    • Section 3: Transmission Mechanisms
    • Section 4: Suggested Reading
  • Chapter 25: Inflation and Money
    • Section 1: Empirical Evidence of a Money-Inflation Link
    • Section 2: Why Have Central Bankers So Often Gotten It Wrong?
    • Section 3: Suggested Reading
  • Chapter 26: Rational Expectations Redux: Monetary Policy Implications
    • Section 1: Rational Expectations
    • Section 2: New Keynesians
    • Section 3: Inflation Busting
    • Section 4: Suggested Reading
Robert E. Wright
Robert E. Wright

Robert E. Wright is a Clinical Associate Professor of Economics at the Stern School of Business at New York University. He is the author of ten books on financial history, publishing, and the economics of construction and other lagging sectors, including most recently "One Nation Under Debt: Hamilton, Jefferson, and the History of What We Owe" (McGraw-Hill, March 2008). The current economic crisis has kept him busy - his commentary has been featured in Barron's, the Chicago Tribune, CNN, the Los Angeles Times, the New York Times, the Wall Street Journal, and the Washington Post - to name a few. Luckily for us, he is a disciplined guy and his book is still coming out on time!

Professor Wright is currently working on a Yale University Press book co-authored with Ron Michener of the University of Virginia on the monetary causes of the American Revolution and an extensive study of entrepreneurship and corporate governance in early America with Stern professor Richard E. Sylla.

Professor Wright is also a curator for the Museum of American Finance and the academic editor of Pickering and Chatto's Financial History Monograph series. He sits on the investment committee of the Business History Conference and since 2006 has been the recipient of grants from the Virginia Historical Society, the Ewing Marion Kauffman Foundation, and the National Science Foundation.

Since 2003, Robert E. Wright has taught "Money and Power" and other courses at New York University's Stern School of Business. Before that, he taught Money and Banking at the University of Virginia.


Vincenzo Quadrini
Vincenzo Quadrini

Vincenzo Quadrini, Ph.D., is Professor of Finance and Business Economics at the Marshall School of Business, University of Southern California. He received his M.A. in economics from Coripe-Piemonte in Turin, Italy, and his Ph.D. in economics from the University of Pennsylvania. Prior to his current position, he was an assistant professor at New York University's Stern School of Business, Duke University, and Pompeu Fabra University. His research is on Macroeconomics, International Economics, Financial Contracts and Entrepreneurship.

Dr. Quadrini has published articles in a wide range of journals including American Economic Review, Journal of Monetary Economics, Journal of Political Economy, and the Review of Economic Studies. He is a Co-Editor of Economic Inquiry and an Associate Editor of the Review of Economic Dynamics.

Dr. Quadrini also serves as research fellow at the Center for Economic Policy Research, and at the National Bureau of Economic Research.

  • Instructor Manual

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  • PowerPoint Lecture Notes

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  • Test Item File

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Schools Using Money and Banking by Robert E. Wright and Vincenzo Quadrini :

  • Augustana College
  • California State University Northridge
  • Central Michigan University
  • Dillard High School
  • Dominican College
  • DUS
  • Florida State University
  • Illinois State University
  • Lyndon State College
  • Misericordia University
  • Princeton University
  • Rutgers University - New Brunswick
  • University of Guam
  • University of Massachusetts-Boston
  • University of Minnesota Morris
  • University of Phoenix
  • University of Southern Maine
  • Western Oregon University
  • Westminster College