Monetary Economics

  1. Monetary Theory: The Demand for Money and Interest Rates
    1. Theories of Money Demand
      1. The Quantity Theory of Money
        1. Classical Quantity Theory
          1. Fisher's Equation of Exchange
            1. Velocity of Money
              1. Assumptions and Implications
                1. Constant Velocity
                  1. Full Employment
                    1. Money Neutrality
                  2. The Cambridge Approach (k-ratio)
                    1. Cash Balance Approach
                      1. Cambridge Equation
                        1. Comparison with Fisher's Approach
                        2. Modern Interpretations
                          1. Monetarist Revival
                            1. Empirical Testing
                          2. Keynesian Theories of Money Demand
                            1. The Transactions Motive
                              1. Medium of Exchange Function
                                1. Income Elasticity
                                  1. Baumol-Tobin Model
                                    1. Inventory Approach
                                      1. Square Root Rule
                                        1. Interest Rate Effects
                                      2. The Precautionary Motive
                                        1. Uncertainty and Liquidity
                                          1. Buffer Stock Demand
                                            1. Income and Interest Rate Effects
                                            2. The Speculative Motive
                                              1. Asset Demand for Money
                                                1. Interest Rate Expectations
                                                  1. Liquidity Trap
                                                  2. The Liquidity Preference Function
                                                    1. Total Money Demand
                                                      1. Interest Elasticity
                                                        1. Income Elasticity
                                                      2. Modern Quantity Theory
                                                        1. Friedman's Modern Quantity Theory
                                                          1. Permanent Income Hypothesis
                                                            1. Money as Durable Good
                                                              1. Portfolio Approach
                                                                1. Empirical Evidence
                                                                  1. Money Demand Stability
                                                                2. Comparison with Keynesian Theory
                                                                  1. Interest Rate Effects
                                                                    1. Velocity Behavior
                                                                  2. Portfolio Theories of Money Demand
                                                                    1. Asset Substitution
                                                                      1. Money vs. Bonds
                                                                        1. Risk-Return Analysis
                                                                        2. Risk and Return Considerations
                                                                          1. Expected Returns
                                                                            1. Variance of Returns
                                                                              1. Covariance Effects
                                                                              2. Modern Portfolio Theory Applications
                                                                                1. Mean-Variance Analysis
                                                                                  1. Capital Asset Pricing Model
                                                                              3. Interest Rate Determination
                                                                                1. The Theory of Portfolio Choice
                                                                                  1. Risk, Return, and Liquidity
                                                                                    1. Expected Return
                                                                                      1. Risk Measurement
                                                                                        1. Liquidity Premium
                                                                                        2. Diversification
                                                                                          1. Portfolio Risk Reduction
                                                                                            1. Correlation Effects
                                                                                              1. Optimal Portfolio Selection
                                                                                            2. The Bond Market and Loanable Funds Framework
                                                                                              1. Demand for Bonds
                                                                                                1. Wealth Effects
                                                                                                  1. Total Wealth
                                                                                                    1. Wealth Distribution
                                                                                                    2. Expected Returns
                                                                                                      1. Interest Rate Expectations
                                                                                                        1. Capital Gains/Losses
                                                                                                        2. Risk and Liquidity
                                                                                                          1. Default Risk
                                                                                                            1. Liquidity Considerations
                                                                                                            2. Information Costs
                                                                                                              1. Search Costs
                                                                                                                1. Monitoring Costs
                                                                                                              2. Supply of Bonds
                                                                                                                1. Government Borrowing
                                                                                                                  1. Fiscal Policy
                                                                                                                    1. Deficit Financing
                                                                                                                    2. Corporate Issuance
                                                                                                                      1. Investment Opportunities
                                                                                                                        1. Capital Structure Decisions
                                                                                                                        2. Household Borrowing
                                                                                                                          1. Mortgage Markets
                                                                                                                            1. Consumer Credit
                                                                                                                          2. Market Equilibrium
                                                                                                                            1. Interest Rate Determination
                                                                                                                              1. Shifts in Supply and Demand
                                                                                                                                1. Comparative Statics
                                                                                                                              2. The Liquidity Preference Framework
                                                                                                                                1. Demand for Money
                                                                                                                                  1. Interest Rate Sensitivity
                                                                                                                                    1. Income Effects
                                                                                                                                      1. Price Level Effects
                                                                                                                                      2. Supply of Money
                                                                                                                                        1. Central Bank Actions
                                                                                                                                          1. Money Multiplier Effects
                                                                                                                                            1. Exogenous vs. Endogenous Money
                                                                                                                                            2. Equilibrium in the Market for Money
                                                                                                                                              1. Interest Rate Adjustment
                                                                                                                                                1. Excess Demand/Supply
                                                                                                                                                  1. Stability Conditions
                                                                                                                                              2. The Risk and Term Structure of Interest Rates
                                                                                                                                                1. Risk Structure
                                                                                                                                                  1. Default Risk
                                                                                                                                                    1. Credit Ratings
                                                                                                                                                      1. Rating Agencies
                                                                                                                                                        1. Rating Categories
                                                                                                                                                          1. Rating Changes
                                                                                                                                                          2. Risk Premiums
                                                                                                                                                            1. Credit Spreads
                                                                                                                                                              1. Default Probabilities
                                                                                                                                                                1. Recovery Rates
                                                                                                                                                                2. Flight to Quality
                                                                                                                                                                  1. Safe Haven Effects
                                                                                                                                                                    1. Liquidity Crises
                                                                                                                                                                  2. Liquidity
                                                                                                                                                                    1. Marketability of Securities
                                                                                                                                                                      1. Bid-Ask Spreads
                                                                                                                                                                        1. Trading Volume
                                                                                                                                                                          1. Liquidity Premiums
                                                                                                                                                                          2. Income Tax Considerations
                                                                                                                                                                            1. Tax Treatment of Interest Income
                                                                                                                                                                              1. Municipal Bond Tax Exemption
                                                                                                                                                                                1. After-Tax Returns
                                                                                                                                                                              2. Term Structure
                                                                                                                                                                                1. Yield Curves
                                                                                                                                                                                  1. Types of Yield Curves
                                                                                                                                                                                    1. Normal (Upward Sloping)
                                                                                                                                                                                      1. Inverted (Downward Sloping)
                                                                                                                                                                                        1. Flat
                                                                                                                                                                                          1. Humped
                                                                                                                                                                                          2. Interpretation
                                                                                                                                                                                            1. Economic Expectations
                                                                                                                                                                                              1. Monetary Policy Stance
                                                                                                                                                                                                1. Recession Indicators
                                                                                                                                                                                              2. Expectations Theory
                                                                                                                                                                                                1. Pure Expectations Theory
                                                                                                                                                                                                  1. Future Interest Rate Expectations
                                                                                                                                                                                                    1. Forward Rates
                                                                                                                                                                                                      1. Limitations and Criticisms
                                                                                                                                                                                                      2. Segmented Markets Theory
                                                                                                                                                                                                        1. Market Segmentation by Maturity
                                                                                                                                                                                                          1. Preferred Habitat
                                                                                                                                                                                                            1. Institutional Factors
                                                                                                                                                                                                              1. Supply and Demand by Maturity
                                                                                                                                                                                                              2. Liquidity Premium and Preferred Habitat Theories
                                                                                                                                                                                                                1. Risk Premiums for Longer Maturities
                                                                                                                                                                                                                  1. Maturity Risk
                                                                                                                                                                                                                    1. Investor Preferences
                                                                                                                                                                                                                      1. Combining Expectations and Risk Premiums

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                                                                                                                                                                                                                3. The Conduct of Monetary Policy: Tools and Targets

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                                                                                                                                                                                                                5. The Transmission Mechanisms of Monetary Policy