Modeling Monetary Economies / Edition 3

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Organized into three sections of increasing complexity. Part One examines money in isolation--demand for fiat money, a comparison of fiat and commodity monies, inflation and exchange rate. The second section adds capital to study money's interaction with other assets and banking. Lastly, it looks at money's effect on saving, investment and output through its effect on nonmonetary government debt.
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Editorial Reviews

An exposition of monetary economics for intermediate and advanced undergraduate students with an understanding of basic graphs and algebra, but not necessarily of calculus. Draws on the overlapping models of money from the past few generations to investigate such questions as how money promotes exchange, what should serve as money, and what causes inflation and how much it costs. Annotation c. Book News, Inc., Portland, OR (
From the Publisher
"This is simply the best book on monetary theory with which I am familiar. I cannot emphasize strongly enough how this book belongs in the curriculum of advanced undergraduates. There is no acceptable alternative. Former students have told me that the best favor that they did for themselves, before going to graduate school in economics, was reading the earlier version of Champ and Freeman, cover to cover. In a better world, this would be the standard undergraduate macro text; and with the improvements in the new version, particularly the inclusion of the seminal Lucas model of price surprises, it may yet become so. The ideal course is based on Champ and Freeman, and on Russell W. Cooper, Coordination Games: Complementaries and Macroeconomics, Cambridge University Press, 1999. If you cannot do this for your intermediate students, do it for your advanced students." John Bryant, Rice University, and CentER, Tilburg University

"This is without a doubt the best text on the market in advanced undergraduate or masters-level monetary economics. Champ and Freeman provide a unified theoretical treatment of all the important topics in money and banking, and their second edition adds important topics in material on central banking, and the payments system." Stephen D. Williamson, University of Iowa

"This is an absolutely outstanding textbook. The authors are able to communicate at a very basic but rigorous level many of the complex and subtle issues being tackled by monetary theorists at the frontier of the discipline. The text is easy to read and the theoretical analysis is applied to many real-world issues and phenomena, which make it a big hit with my students." David Andolfatto, Simon Fraser University

"Champ and Freeman's book is excellent in the way that it teaches students to use dynamic models to think carefully about important monetary, fiscal, and macroeconomic issues. The authors put the models to work to explain a variety of classic and contemporary problems in macroeconomics. The models are rigorous and carefully explained, yet they are simple enough that undergraduates can quickly learn to put them to work. I used the first edition of this book to teach undergraduates. This edition is even better than the first." Thomas Sargent, Stanford University

"In this book, Champ and Freeman do an admirable job of making modern monetary economics accessible to students. I've used it as the main text, with good results, both at the undergraduate and master's level. The well-chosen data illustrations added in the second edition can only enhance its student appeal." Finn Kydland, Carnegie Mellon University

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Product Details

  • ISBN-13: 9781107003491
  • Publisher: Cambridge University Press
  • Publication date: 5/9/2011
  • Edition number: 3
  • Pages: 358
  • Product dimensions: 7.20 (w) x 10.10 (h) x 1.00 (d)

Meet the Author

Bruce Champ is Senior Research Economist at the Federal Reserve Bank of Cleveland. Earlier he taught at Virginia Polytechnic Institute, the Universities of Iowa and Western Ontario, and Fordham University. Dr Champ's research interests focus on monetary economics and his articles have appeared in the American Economic Review, the Journal of Monetary Economics, the Canadian Journal of Economics and the Journal of Money, Credit, and Banking, among other leading academic publications. He coauthored the first and second editions of Modeling Monetary Economies with the late Scott Freeman.

Scott Freeman was a Professor of Economics at the University of Texas, Austin. He taught earlier at Boston College and the University of California, Santa Barbara. Professor Freeman died in 2004 after struggling with amyotrophic lateral sclerosis for several years. Professor Freeman specialized in monetary theory, and his articles appeared in the Journal of Political Economy, the American Economic Review, the Journal of Monetary Economics and the Journal of Money, Credit, and Banking, among other eminent academic journals.

Joseph Haslag is Professor and Kenneth Lay Chair in Economics at the University of Missouri, Columbia. He previously worked as an economist at the Federal Reserve Bank of Dallas. He also taught at the Southern Methodist University and at Michigan State University. Professor Haslag has focused on monetary economics, and his articles have appeared in the Review of Economics and Statistics, the Journal of Monetary Economics, the Review of Economic Dynamics and the International Economic Review, among other leading academic journals.

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Table of Contents

Pt. I Money 1
1 A Simple Model of Money 3
2 Barter and Commodity Money 33
3 Inflation 48
4 International Monetary Systems 74
5 Price Surprises 99
Pt. II Banking 115
6 Capital 117
7 Liquidity and Financial Intermediation 138
8 Central Banking and the Money Supply 150
9 Money Stock Fluctuations 169
10 Fully Backed Central Bank Money 185
11 The Payments System 200
12 Bank Risk 214
Pt. III Government Debt 231
13 Deficits and the National Debt 233
14 Savings and Investment 255
15 The Effect of the National Debt on Capital and Savings 270
16 The Temptation of Inflation 288
References 307
Author Index 313
Subject Index 315
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