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Money and Banking: What Everyone Should Know

An economist and award-winning professor leads you in a panoramic exploration of our monetary and financial systems, their inner workings, and their crucial role and presence in your world.
Money and Banking: What Everyone Should Know is rated 3.9 out of 5 by 68.
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Rated 5 out of 5 by from Informative and Engaging A great introduction to an often complex topic. So well done!
Date published: 2023-11-15
Rated 1 out of 5 by from Bank industry spiel marketed as scholarship. The actual content in terms of economics is about 8th grade level, as an earlier reviewer had noted. Ask yourself this: if money creation is an act of social fiat, then why do private banks hold that power through their ownership of the Federal Reserve? The lecturer like the Fed itself won't go there. Compare the discussion at about the Fed's own "defensive" stance on this power, as appears on the Fed's website. I would substitute dishonest for the word defensive. The Great Courses can do better than this.
Date published: 2023-02-05
Rated 3 out of 5 by from Good in parts The scope of the talk was good and covered most of what I wanted. However, the lecturer spent too long going through example calculation that I felt did not add to my understanding and became tedious.
Date published: 2022-01-31
Rated 5 out of 5 by from Great course This professor speaks very slowly, but makes up for it with the amount of knowledge he provides. Covers all topics and goes in depth.
Date published: 2021-05-10
Rated 4 out of 5 by from Great Course Although I studied Economics as a basic University course, however the intricacies and interdependencies of factors such as interest rate, inflation rate and how it influences different economic forces and the decision-making of various stakeholders such as consumers, producers and financial institutions had gotten a bit rustic over the years. I essentially bought this course for a refresher of high level understanding of these market economic forces and their relationships to get a better sense of ever-changing economic news that make to the breaking news slot. I think the course was very methodically organized and the professor covered the relevant sections very thoroughly. This course is not for someone who is looking for a deeper understanding of functions of money and the role it plays in our lives but rather a helicopter view, which for my intents and purposes was quite sufficient. The few lectures on role of central bank, its independence, its objectives in the context of monetary policy involved discussions on few algebraic equations that possibly were relevant for the context, but I found them not too pertinent, and one can skip those lectures without losing the big picture role of a central bank.
Date published: 2021-02-05
Rated 5 out of 5 by from Exactly what I was looking for I'm not a beginner whatsoever, but I was looking for something that would help solidify the basics that I already knew, and fill in the gap with some interesting examples. This series of lectures does this very well. The instructor is very clear and interesting, and he doesn't waste words or make things unnecessarily complicated. If I was still in University, this is the kind of professor that I would seek out and take every class they had. He definitely speaks slowly and clearly, which some people may not like, but I'm a big fan.
Date published: 2020-09-14
Rated 2 out of 5 by from 36 lecures, but the lecturer speaks v-e-r-y s-l-o-w-l-y. At normal lecture pace, eliminating the out-of-date name-dropping and tightening up the script, about 24 lectures. Presented at about a Grade 8 level, I hope that's not what a typical economist thinks of "everyone". Some explanation of jargon, but very unsophisticated, pretty much useless for understanding real world economic policy debates. It's easy to see why it's called the "Dismal Science". At least the lecturer doesn't use the word "honesty" in his Wall Street and political hagiography. Not recommended for people looking for a university-level course.
Date published: 2020-07-17
Rated 1 out of 5 by from Pedantically slow and somewhat convoluted While I've enjoyed your other courses, this one fell short of my expectations and needs. The course lacks a certain continuity. While it starts with the Big picture, there is no development of the context of the course. There is just a dive into individual topics, that from a beginners view, appear disjoint and unrelated. There's also the unresolved abstraction that is Money, and why it was tied so strongly to gold. And now, somehow, it's energized by a global flow of Trust and Confidence (interesting coincidence that Dow and Tao sound the same). Some elaboration here might create the context I'm looking for. Several other Primary Concepts seemed equally mysterious and foggy. Understandably, it's sometime difficult for an expert like Prof Salemi to “bring it down” to the novice level. Concepts and theory that may seem obvious over time begin as fuzzy ideas – otherwise, they wouldn't need to be taught! And finally, the presentation style seemed overly pedantic and slow. This, in my opinion, was heightened by an aggressive overuse of humor that he enjoyed, perhaps more than his audience. The anecdotal stories, while humanizing, only tended to exacerbate the situation. I realize this is probably a difficult course to teach because Money is the ultimate abstraction. We make something out of nothing and build great Empires upon It. Maybe that's why none of them last!?
Date published: 2020-07-14
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Get a penetrating look at the financial institutions that are fundamental to your life with the 36 detailed lectures of Money and Banking: What Everyone Should Know. Award-winning Professor Michael K. Salemi investigates a range of pivotal and fascinating topics. Among these: the history of money; how money is created by commercial and central banks; the role of public confidence in the stability of financial systems; the psychology of stock market "bubbles"; the connection between Wall Street and Main Street; and more.


Michael K. Salemi

Most of us like money and believe we should have more of it.


University of North Carolina, Chapel Hill

Dr. Michael K. Salemi is Professor of Economics at The University of North Carolina at Chapel Hill. He completed undergraduate studies in economics at St. Mary's College in Winona, Minnesota, master's degrees in economics from Purdue University and the University of Minnesota-Minneapolis, and a doctorate in economics from the University of Minnesota-Minneapolis. Professor Salemi has received numerous teaching awards from UNC-Chapel Hill, including the Tanner Award for Teaching and the Economics Undergraduate and Graduate Teaching awards. He has been recognized nationally with the Bower Medal in Economic Education from the Council for Economic Education and the Villard Award for Research in Economic Education from the National Association of Economic Educators. The Gus A. Stavros Center named him a Great Teacher in Economics in 2007. Professor Salemi is the author of two books and more than 60 published articles in macroeconomics, domestic and international monetary theory, and economic education. An acknowledged expert in economic education, Professor Salemi has been an instructor, workshop director, and workshop program director for national programs in teacher education. He has served on and chaired the Committee on Economic Education for the American Economic Association.

By This Professor

Money and Banking: What Everyone Should Know
Money and Banking: What Everyone Should Know


The Importance of Money

01: The Importance of Money

What is money? Consider the fundamental nature of money as a social contract and a social institution that coordinates economic activity. Explore the connections between financial institutions and economic well-being, including the importance of "stable value money" to trade and the critical roles of healthy banks, efficient asset markets, and monetary policy....

31 min
Money as a Social Contract

02: Money as a Social Contract

Money developed as a medium of exchange to facilitate trade. Here, learn about five stages in the evolution of money. Beginning with barter, trace the rise of commodities as money, the invention of coins, paper money backed by precious metals, and finally our era's "fiat" money, which has value by agreement alone....

30 min
How Is Money Created?

03: How Is Money Created?

Study the invention of paper money in the history of goldsmiths issuing paper receipts backed by gold deposits. Then trace the important history of the gold standard, upon which nations pegged the value of currencies, and the reasons the gold standard was abandoned in 1971....

30 min
Monetary History of the United States

04: Monetary History of the United States

The U.S. government's role in financial affairs has been historically controversial. Learn about the two failed attempts in early U.S. history to establish a central bank, followed by the system of "national" banks chartered in the 1860s. Follow key issues surrounding national currency and coinage, leading to the Federal Reserve Act of 1913....

28 min
Local Currencies and Nonstandard Banks

05: Local Currencies and Nonstandard Banks

Finance is not just the business of the wealthy. Here, study nontraditional models for solving economic problems, from examples of local currencies galvanizing local economies to "microfinance" arrangements such as Bangladesh's Grameen Bank, which create highly successful savings and loan programs for the poor....

30 min
How Inflation Erodes the Value of Money

06: How Inflation Erodes the Value of Money

This lecture investigates the factors governing inflation, beginning with an inflation history of the United States over the last century. Learn about the correlation between inflation and the consumer price index, and how inflation is triggered by excess money growth. Also, review inflation's detrimental effects and costs....

30 min
Hyperinflation Is the Repudiation of Money

07: Hyperinflation Is the Repudiation of Money

The history of hyperinflation offers both a compelling story and a cautionary tale of inflation's damaging effects. Trace the root causes of extreme inflation in governments that finance deficits by printing new money. Then, study key cases of hyperinflation, its "vicious circle" quality, and the inevitable fiscal reform that ends it....

29 min
Saving-The Source of Funds for Investment

08: Saving-The Source of Funds for Investment

Explore the meaning of "investment" in economics as increases to a nation's "capital stock"-the equipment, technology, and human resources used in the production process. Then see how investment is made possible by domestic saving and foreign borrowing, and how investment is critically related to economic growth....

32 min
The Real Rate of Interest

09: The Real Rate of Interest

Understanding how interest rates work sheds important light on our economy. Study the difference between the "nominal" or agreed-upon interest rate in a loan transaction and the "real" rate of interest. Learn how the "real" rate factors in the rate of inflation to determine the actual cost/benefit of borrowing and lending....

28 min
Financial Intermediaries

10: Financial Intermediaries

Financial intermediaries or "middlemen" play an important role in modern economies. Investigate how intermediaries such as commercial banks facilitate borrowing and lending, which provide valuable services to each party. Afterward, study the fundamental types of intermediary institutions, including savings banks, mutual funds, money market funds, and insurance companies....

32 min
Commercial Banks

11: Commercial Banks

In learning how commercial banks operate, examine the sources from which banks acquire their funds and how they use the funds they acquire, as well as how assets and liabilities function within banks. Finally, study three formal definitions of money, and how banks literally create money in the process of making loans....

30 min
Central Banks

12: Central Banks

Investigate the role and importance of central banks as they provide banking services to commercial banks, focusing on the U.S. Federal Reserve. See how central banks control an economy's interest rates and create money, and how their ability to increase or decrease the money supply makes them the world's most powerful financial institutions....

29 min
Present Value

13: Present Value

Present value is an important formula for computing the current value of payments that will be received or made in the future. Learn how present value is used, in the examples of determining the current value of a savings bond and how much to save per year for future college tuition....

30 min
Probability, Expected Value, and Uncertainty

14: Probability, Expected Value, and Uncertainty

This lecture explores how financial decisions are made in the face of future uncertainty. Using the examples of both a dice game and a real-world business strategy, study the statistical tool of "expected value" as a method of predicting possible outcomes. See how the probability of expected profits influences business decisions....

29 min
Risk and Risk Aversion

15: Risk and Risk Aversion

Economists have developed ways of assessing people's willingness to take on risk in financial decision making. With reference to the "St. Petersburg Paradox," a classic problem relating to odds in gambling, observe how individuals tend to value the dollars they might lose more highly than the dollars they might win....

29 min
An Introduction to Bond Markets

16: An Introduction to Bond Markets

Bond markets play a key economic role by channeling funds from savers to government and private entities that need funding beyond their current revenues. In this lecture, study the various types of bond instruments, including Treasury bills, notes, and bonds. Learn also about important factors underlying the federal deficit and the national debt....

31 min
Bond Prices and Yields

17: Bond Prices and Yields

In a deeper look at bonds, investigate how secondary markets for bonds operate and what they offer investors. Study fundamental concepts including the "yield to maturity" of bonds and the "holding period yield" in understanding the link between bond prices and interest rates and how economic events change them....

30 min
How Economic Forces Affect Interest Rates

18: How Economic Forces Affect Interest Rates

Changes in interest rates have widespread economic effects. Consider interest rates as market prices, set by the current market for credit. Then see how interest rates are determined in the long run by patterns of saving and investment, and in the short run by factors such as government deficits and recessions....

28 min
Why Interest Rates Move Together

19: Why Interest Rates Move Together

The many interest rates in different areas of the economy tend to change together over time. Here, learn about the key factors that govern this, beginning with the ways that interest rates adjust to expected changes in inflation. Observe also how risk in borrowing and lending affects the rate of interest....

33 min
The Term Structure of Interest Rates

20: The Term Structure of Interest Rates

The formula known as the "Expectations Hypothesis" allows analysts to forecast future interest rates and conditions in the credit market. Understand the intuition behind the hypothesis, study the formula itself as it tracks yields on Treasury securities, and see how it benefits borrowers considering mortgages and loans....

32 min
Introduction to the Stock Market

21: Introduction to the Stock Market

Stock markets provide individuals the chance to share in the ownership and profits of corporations. Investigate the history of stock markets, their basic functions on behalf of investors, and how trades are made. Finally, learn about the various stock indexes that track the markets, and how mutual funds operate....

30 min
Stock Price Fundamentals

22: Stock Price Fundamentals

What determines prices in the stock market? Approach this question first through the "market fundamentals" model of stock prices, a formula linking a firm's capital, profits, and dividends to its share price. Contrast this with the "capital asset pricing model," which evaluates the rate of return an investor requires....

32 min
Stock Market Bubbles and Irrational Exuberance

23: Stock Market Bubbles and Irrational Exuberance

This lecture introduces the fascinating group psychology of stock investing. Study the phenomenon of stock market "bubbles," in which prices are driven up without reference to profitability data. Then, grasp the "bubble" mind-set, which triggers speculative buying and selling based only on what others are paying....

28 min
Derivative Securities

24: Derivative Securities

Derivative securities play an important role in finance by allowing business decision makers and private investors to lower risk. See how derivative securities are created using underlying products, and study the major types of derivatives and how they function, including stock options, commodities futures, mutual funds, and "collateralized" debt obligations....

32 min
Asymmetric Information

25: Asymmetric Information

Asymmetric information occurs when one party in a financial transaction has more relevant information than another. Learn how this affects financial markets; in particular, the challenges it presents for borrowers and lenders. Also, discover why so few firms issue stocks and bonds, and why banks are so restrictive in regard to loan practices....

29 min
Regulation of Financial Firms

26: Regulation of Financial Firms

Consider the case for government bailouts of financial firms, and why such actions are in the public interest. Then examine the types of government regulation of financial institutions, and see how the 20th-century history of bank regulation was a "tug of war" between looser and stricter rules....

31 min
Subprime Mortgage Crisis and Reregulation

27: Subprime Mortgage Crisis and Reregulation

The subprime mortgage crisis of 2008 offers a clear example of breakdown followed by regulatory reform. Trace the dramatic events that led to the crisis, and learn about the mortgage-backed derivative securities that contributed to it. Finally, examine the provisions of the Dodd-Frank Act, designed to address the crisis's causes....

31 min
Interest Rate Policy at the Fed and ECB

28: Interest Rate Policy at the Fed and ECB

Interest rate policy is fundamental to the role and function of central banks. Investigate how the Federal Reserve raises and lowers short-term interest rates in pursuing its objectives of stabilizing prices and promoting a healthy economy. Compare the Fed's policies with the European Central Bank's, noting key similarities and differences....

31 min
The Objectives of Monetary Policy

29: The Objectives of Monetary Policy

This lecture asks the question: What should the objectives of a government's monetary policy be? Explore the ways in which monetary policy on the part of central banks affects economies. Study the monetary policy mandates of several different nations, and consider whether the Fed's own dual mandate may be too broad....

30 min
Should Central Banks Follow a Policy Rule?

30: Should Central Banks Follow a Policy Rule?

The question of policy rules versus policy "discretion" highlights how central banks operate. Examine the case favoring predictable policy by the Fed in addressing economic events, compared with treating each event as unique. Evaluate the claim that the Fed followed a specific policy rule during the term of Alan Greenspan....

30 min
Extraordinary Tools for Extraordinary Times

31: Extraordinary Tools for Extraordinary Times

Responding to the Great Recession of 2008, the Federal Reserve took unprecedented actions to address the crisis. Here, observe how the Fed intervened in credit markets, provided remedies for banks, and stimulated the economy, and consider the question of whether its actions went too far, paving the way for future inflation....

29 min
Central Bank Independence

32: Central Bank Independence

Traditional thinking says that central banks must be independent of political pressures in order to best perform their function. Learn how economists define and measure "independence" and "transparency" of the central banks of the world. Investigate whether greater independence of central banks is associated with desirable economic outcomes....

32 min
The Foreign Exchange Value of the Dollar

33: The Foreign Exchange Value of the Dollar

Turning to international finance, grasp how currency exchange rates operate based on demand and supply, and how this system accounts for the devaluing of the U.S. dollar over the last two decades. Also study China's exchange system, which pegs its currency to the U.S. dollar, and its implications for the global economy....

29 min
Exchange Rates and International Banking

34: Exchange Rates and International Banking

Understanding the movement of exchange rates gives key insight into international banking relationships. Investigate the factors that determine exchange rates in both the short and long run, and learn how economists evaluate currencies as over- or undervalued. Observe how international banks play an ever-increasing role in finance, and why this is so....

32 min
Monetary Policy Coordination

35: Monetary Policy Coordination

The coordination of monetary policy between nations has important effects on the world economy. Using specific examples, evaluate the benefits of coordinated interest rate policy versus the outcomes of given nations acting alone. Learn about the International Monetary Fund, its functions, and the role it plays in maintaining worldwide financial stability....

30 min
Challenges for the Future

36: Challenges for the Future

In concluding, consider three key questions facing the world's financial systems: Will the United States solve its chronic deficit problem? Will the euro survive? And will financial regulators find a solution for the "too big to fail" problem? Examine the complex challenges posed by these issues and their critical implications for our economic future....

34 min