Preparing for Business ExamsPreparing for business exams involves mastering both conceptual understanding and practical application. Students
are encouraged to study theories and frameworks but also
Instructor's Manual
Modeling Monetary
Economics
4th Edition
By
Bruce Champ, Scott Freeman
Joseph Haslag
Complete Guide A+
, Table of Contents With Details
Preparing for Business ExamsPreparing for business exams involves mastering both conceptual understanding and practical application. Students are
encouraged to study theories and frameworks but also
Chapter 1:
In this chapter, the aim is to develop a model of the economy in which trade
makes people better off. A model description has four main parts: (i) there is a
description of the physical environment, which consists of things like how long
does the economy last, who lives there, how long each person lives, what goods
are present, and what meetings occur between people; (ii) there is a description
of how people get goods, such as things they are endowed with over their
lifetime or the ways in which they can produce things; (iii) we need to know
what kinds of goods people like and be able to compare different bundles of
goods; and (iv) we need a way to combine the different actions that people want
to take so that the quantity supplied is equal to quantity demanded. With all four
pieces together, we have a model economy.
Chapter 2: A Simple Model of Money
Students need repetition and practice to learn the technical material in early
chapters. Since they use these tools throughout the book, this material will be
worth a careful presentation even if progress seems slow to the teacher. This is
why the book covers separately the nearly redundant cases of constant and
growing population. One way to make this seem less repetitious is to ask the
students to do the growing population case as a homework assignment, then go
over it in class.
Students often confuse the budget and feasible sets because both use
many of the same variables and in this chapter, they turn out to be identical.
Take care to differentiate the two by distinguishing their origins.
The appendix using calculus is a minimal exposition of how calculus can be
used to solved the models. It is not required for any material taught in the book
but is inserted for those teachers who wish to teach using calculus.
Chapter 3: Barter and Commodity Money
This chapter deals with barter and commodity money exchange and may be
skipped. It might also be covered after Chapter 4 or 5 if you find the barter
model too distracting from the standard overlapping generations model of
Chapters 2, 4 and 5. Also, one might teach one of the two topics without teaching
the other, although we found that the topics go well together.
, Chapter 4: Inflation
Preparing for Business ExamsPreparing for business exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and
frameworks but also
This is the key chapter of the book, of great importance for future chapters.
Present it carefully, assigning exercises and going over them in class. Students
often seem to understand this material until they are asked to do it themselves.
Chapter 5: International Monetary Systems
Another endpoint chapter, all or part of which can be skipped or moved.
These international topics are taught earlier than usual because only the basic
model is used. The material on speculative attacks can be tricky, but we find that
students have great interest in this topic.
Chapter 6: Price Surprises
Students may find this material difficult. we have added it to the second edition
nevertheless because of the revolutionary effect of Lucas model on
macroeconomic thought. Related ideas involving rational expectations and
policy advice are covered in Chapters 10 and 17 so this chapter may be skipped if
the students find it too difficult. The emphasis on methodology makes this
chapter better suited to advanced students.
Chapter 7: Capital
This chapter contains all the theory of finance needed for subsequent chapters.
It is not intended as a self-contained finance course. To cover the material in the
second part of the book we needed only one asset as an alternative to fiat money.
We chose capital because of its direct link to output. Many instructors and
students, however, enjoy a more thorough treatment of private debt. The
appendix is for them.
Chapter 8: Liquidity and Financial Intermediation
The material in this chapter is important for the next three chapters but the
appendix stands alone as a foray into a more sophisticated model of banking as
intermediation. The material in this chapter is important for the next three
, chapters but the appendix stands alone as a foray into a more sophisticated
model of banking as intermediation.
Preparing for Business ExamsPreparing for business exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and
frameworks but also
Chapter 9: Central Banking and the Money Supply
Attention paid to the monetary aggregates here will be rewarded in Chapter
10. if desired, the section on central bank lending can be skipped.
Chapter 10: Money Stock Fluctuations
The money/output link studied in this chapter involves a long train of
argument (see Figure 1-.4). Students nevertheless master the material when
taught each step of the argument before studying it all together. We feel it is an
important chapter, the cumulation of Chapters 7 and 8 but it is not required for
later chapters. The appendix, which is separated from the main body of the
chapter because its topic is different, may serve as a useful review and
consolidation of material taught in Chapter 8.
Chapter 11: Fully Backed Central Bank Money
Although the math is not difficult, this can be a puzzling topic for students
because economic behavior in this case is distinctly different from that of the fiat
money economies of other chapters. The section on currency boards presumes a
familiarity with Chapter 5.
Chapter 12: The Payments System
This new chapter stands alone and so may be skipped if desired. The value of
the chapter is its illustration of a nontrivial role for central banking, public or
private. The island structure may take some exposition time, but the essential
market, that for reserves, is easy to present.
Chapter 13: Bank Risk
This chapter stands apart building mostly on the banking models of Chapter 8.
It could be taught directly after that chapter. It is not required for later chapters.
are encouraged to study theories and frameworks but also
Instructor's Manual
Modeling Monetary
Economics
4th Edition
By
Bruce Champ, Scott Freeman
Joseph Haslag
Complete Guide A+
, Table of Contents With Details
Preparing for Business ExamsPreparing for business exams involves mastering both conceptual understanding and practical application. Students are
encouraged to study theories and frameworks but also
Chapter 1:
In this chapter, the aim is to develop a model of the economy in which trade
makes people better off. A model description has four main parts: (i) there is a
description of the physical environment, which consists of things like how long
does the economy last, who lives there, how long each person lives, what goods
are present, and what meetings occur between people; (ii) there is a description
of how people get goods, such as things they are endowed with over their
lifetime or the ways in which they can produce things; (iii) we need to know
what kinds of goods people like and be able to compare different bundles of
goods; and (iv) we need a way to combine the different actions that people want
to take so that the quantity supplied is equal to quantity demanded. With all four
pieces together, we have a model economy.
Chapter 2: A Simple Model of Money
Students need repetition and practice to learn the technical material in early
chapters. Since they use these tools throughout the book, this material will be
worth a careful presentation even if progress seems slow to the teacher. This is
why the book covers separately the nearly redundant cases of constant and
growing population. One way to make this seem less repetitious is to ask the
students to do the growing population case as a homework assignment, then go
over it in class.
Students often confuse the budget and feasible sets because both use
many of the same variables and in this chapter, they turn out to be identical.
Take care to differentiate the two by distinguishing their origins.
The appendix using calculus is a minimal exposition of how calculus can be
used to solved the models. It is not required for any material taught in the book
but is inserted for those teachers who wish to teach using calculus.
Chapter 3: Barter and Commodity Money
This chapter deals with barter and commodity money exchange and may be
skipped. It might also be covered after Chapter 4 or 5 if you find the barter
model too distracting from the standard overlapping generations model of
Chapters 2, 4 and 5. Also, one might teach one of the two topics without teaching
the other, although we found that the topics go well together.
, Chapter 4: Inflation
Preparing for Business ExamsPreparing for business exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and
frameworks but also
This is the key chapter of the book, of great importance for future chapters.
Present it carefully, assigning exercises and going over them in class. Students
often seem to understand this material until they are asked to do it themselves.
Chapter 5: International Monetary Systems
Another endpoint chapter, all or part of which can be skipped or moved.
These international topics are taught earlier than usual because only the basic
model is used. The material on speculative attacks can be tricky, but we find that
students have great interest in this topic.
Chapter 6: Price Surprises
Students may find this material difficult. we have added it to the second edition
nevertheless because of the revolutionary effect of Lucas model on
macroeconomic thought. Related ideas involving rational expectations and
policy advice are covered in Chapters 10 and 17 so this chapter may be skipped if
the students find it too difficult. The emphasis on methodology makes this
chapter better suited to advanced students.
Chapter 7: Capital
This chapter contains all the theory of finance needed for subsequent chapters.
It is not intended as a self-contained finance course. To cover the material in the
second part of the book we needed only one asset as an alternative to fiat money.
We chose capital because of its direct link to output. Many instructors and
students, however, enjoy a more thorough treatment of private debt. The
appendix is for them.
Chapter 8: Liquidity and Financial Intermediation
The material in this chapter is important for the next three chapters but the
appendix stands alone as a foray into a more sophisticated model of banking as
intermediation. The material in this chapter is important for the next three
, chapters but the appendix stands alone as a foray into a more sophisticated
model of banking as intermediation.
Preparing for Business ExamsPreparing for business exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and
frameworks but also
Chapter 9: Central Banking and the Money Supply
Attention paid to the monetary aggregates here will be rewarded in Chapter
10. if desired, the section on central bank lending can be skipped.
Chapter 10: Money Stock Fluctuations
The money/output link studied in this chapter involves a long train of
argument (see Figure 1-.4). Students nevertheless master the material when
taught each step of the argument before studying it all together. We feel it is an
important chapter, the cumulation of Chapters 7 and 8 but it is not required for
later chapters. The appendix, which is separated from the main body of the
chapter because its topic is different, may serve as a useful review and
consolidation of material taught in Chapter 8.
Chapter 11: Fully Backed Central Bank Money
Although the math is not difficult, this can be a puzzling topic for students
because economic behavior in this case is distinctly different from that of the fiat
money economies of other chapters. The section on currency boards presumes a
familiarity with Chapter 5.
Chapter 12: The Payments System
This new chapter stands alone and so may be skipped if desired. The value of
the chapter is its illustration of a nontrivial role for central banking, public or
private. The island structure may take some exposition time, but the essential
market, that for reserves, is easy to present.
Chapter 13: Bank Risk
This chapter stands apart building mostly on the banking models of Chapter 8.
It could be taught directly after that chapter. It is not required for later chapters.
