This textbook is designed to be used in an advanced undergraduate
course. The approach of this text is to teach monetary economics
using the classical paradigm of rational agents in a market
setting. Too often monetary economics has been taught as a
collection of facts about existing institutions for students to
memorize. By teaching from first principles instead, the authors
aim to instruct students not only in the monetary policies and
institutions that exist today in the United States and Canada, but
also in what policies and institutions may or should exist tomorrow
and elsewhere. The text builds on a simple, clear monetary model
and applies this framework consistently to a wide variety of
monetary questions. The authors have added in this third edition
new material on money as a means of replacing imperfect social
record keeping, the role of currency in banking panics and a
description of the policies implemented to deal with the banking
crises that began in 2007.
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