One significant change in this edition is that some of the existing material has been reorganized. Over the past several years, monetary policymakers at the Federal Reserve have engaged in a variety of unconventional measures to prop up a weak banking system and promote recovery from a deep recession. Understanding these policies requires a strong background in the details of the monetary system. As a result, this edition covers the topic earlier in the book than did previous editions. A complete treatment of the monetary system and the tools of monetary policy can now be found in Chapter 4.
The biggest change in the book, however, is the addition of Chapter 20, “The Financial System: Opportunities and Dangers.” Over the past several years, in the aftermath of the financial crisis and economic downturn of 2008 and 2009, economists have developed a renewed appreciation of the crucial linkages between the financial system and the broader economy. Chapter 20 gives students a deeper look at this topic. It begins by discussing the functions of the financial system. It then discusses the causes and effects of financial crises, as well as the government policies that aim to deal with crises and to prevent future ones.
All the other chapters in the book have been updated to incorporate the latest data and recent events.
If you want more information about the new edition, click here. To see the new chapter on the financial system, click here.