Monetary Theory and Policy, third edition
This text presents a comprehensive treatment of the most important topics in monetary economics, focusing on the primary models monetary economists have employed to address topics in theory and policy. It covers the basic theoretical approaches, shows how to do simulation work with the models, and discusses the full range of frictions that economists have studied to understand the impacts of monetary policy. Among the topics presented are money-in-the-utility function, cash-in-advance, and search models of money; informational, portfolio, and nominal rigidities; credit frictions; the open economy; and issues of monetary policy, including discretion and commitment, policy analysis in new Keynesian models, and monetary operating procedures.
The use of models based on dynamic optimization and nominal rigidities in consistent general equilibrium frameworks, relatively new when introduced to students in the first edition of this popular text, has since become the method of choice of monetary policy analysis.
This third edition reflects the latest advances in the field, incorporating new or expanded material on such topics as monetary search equilibria, sticky information, adaptive learning, state-contingent pricing models, and channel systems for implementing monetary policy. Much of the material on policy analysis has been reorganized to reflect the dominance of the new Keynesian approach. Monetary Theory and Policy continues to be the only comprehensive and up-to-date treatment of monetary economics, not only the leading text in the field but also the standard reference for academics and central bank researchers.
About the Author
Carl E. Walsh is Professor of Economics at the University of California, Santa Cruz. He is coeditor of the International Journal of Central Banking and Visiting Scholar at the Federal Reserve Bank of San Francisco.
"Carl Walsh's Monetary Theory and Policy is an indispensable bridge between theory and practice. The book is a comprehensive overview of the field. Each topic is addressed by a few models exposited with mathematical rigor and policy insight. The depth and breadth of the model presentations make the book an essential reference for students and central bank economists alike."
Marvin Goodfriend, Tepper School of Business, Carnegie Mellon University
"Carl Walsh's Monetary Theory and Policy provides a rigorous but highly accessible introduction to the toolkit of models used by monetary economists. The present edition incorporates many of the developments of recent years in a rapidly evolving field."
Jordi Gali, Director of CREI and Professor of Economics, Universitat Pompeu Fabra
"This third edition of Walsh's by-now classic on monetary economics represents a major revision and expansion of the previous edition, incorporating new developments in theory, modeling practice, and policy insights. This book is a pleasure to read and study with, thanks to the right balance of insight, rigor, and accessibility. It stands worldwide as the frontier reference text for academic and central bank researchers in monetary theory and policy. It is also a must-read for advanced undergraduate and graduate macroeconomics courses, skillfully combining theory with numerical simulations, policy insights, problem sets, and complementary simulation programs provided on the web."
Klaus Schmidt-Hebbel, Chief of Economic Research, Central Bank of Chile