Monday, March 24, 2008

Looking for an Updated Monetary Textbook

I am slated to teach two sections of undergraduate Money & Banking in the fall semester and am already being accosted by the book reps. Talking with the book reps started me thinking--are there any monetary textbooks out there that will make sense in the fall? Given the ongoing meltdown in financial markets and the many central banking innovations that have taken place in response (e.g. TAF, TSLF), I suspect many, if not all, monetary texts will have gaping holes in them. So I was pleased to read Jim Hamilton was thinking along similar lines when wrote the following:

If you took a college course on monetary policy more than six months ago, what you learned has already been rendered out of date by the big changes Bernanke has implemented in how monetary policy can be used.

So are there any monetary textbooks out there that will reflect the new realities of central banking? Fortunately, we live in a world of the internet and economic blogging where all you need to know about this crisis is just a click away. Still, it would be nice to have a textbook that is current for students.

I should have stated more explicitly that the link above is to Francisco M. Torralba's nice summary of the Fed's new tools. Also, see Vincent Reinhart's article, "The Fed's New Alphabet Soup."


  1. Start writing lecture notes and let the rest of us benefit from them. How's that for an awesome idea?!

  2. Well its not just in their treatment of the Federal Reserve that textbooks are deficient. The whole securitization and shadow banking system concept is barely mentioned. Further, students are given no exposure to the idea that financial instability evolves endogenously and interacts with monetary policy....a lacuna that also plagues macroeconomic textbooks.