"Following the devastating effects on the economy and the financial system of the Covid-19 pandemic, which resulted in a surge in unemployment and business bankruptcies, dramatic swings in stock prices, negative interest rates, and unprecedented monetary policy actions, we doubt anyone needs to be convinced that the study of money, banking, and financial markets is important. And it's exciting . . . sometimes maybe a little too exciting. Over the past 15 years, we have seen dramatic changes in virtually every aspect of how money is borrowed and loaned, how banks and other financial firms operate, and how policymakers regulate the financial system. As a colleague of ours remarked, "I believe if I gave students the same exam I gave 15 years ago, I would require different answers to most of the questions!" Our goal in this textbook is to provide instructors and students with tools to understand these changes in the financial system and in the conduct of monetary policy. We were gratified by the enthusiastic response of students and instructors who used the previous three editions of this book. The response confirmed our view that a modern approach, paying close attention to recent developments in policy and theory, would find a receptive audience. In this fourth edition, we retain the key features of our previous editions while making changes that address feedback from instructors and students and also reflect our own classroom experiences"--