PART I: FOUNDATIONS 1
chapter 1: The Financial System 3
chapter 2: Money and Central Banks 25
PART II: FINANCIAL MARKETS 53
chapter 3: Asset Prices and Interest Rates 55
chapter 4: What Determines Interest Rates? 83
chapter 5: Securities Markets 119
chapter 6: Foreign Exchange Markets 153
PART III: BANKING 185
chapter 7: Asymmetric Information in the Financial System 187
chapter 8: The Banking Industry 213
chapter 9: The Business of Banking 241
chapter 10: Bank Regulation 273
PART IV: MONEY AND THE ECONOMY 299
chapter 11: The Money Supply and Interest Rates 301
chapter 12: Short-Run Economic Fluctuations 329
chapter 13: Economic Fluctuations, Monetary Policy, and the Financial System 373
chapter 14: Inflation and Deflation 401
PART V: MONETARY POLICY 431
chapter 15: Policies for Economic Stability 433
chapter 16: Monetary Institutions and Strategies 463
chapter 17: Monetary Policy and Exchange Rates 493
chapter 18: Financial Crises 523
glossary 545
index 571
iii
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