Money and
monetary policy

PUBLISHED BY THE DEUTSCHE BUNDESBANK

Money and monetary policy

A modern economy cannot function without money. But what actually is money, how is it created, and how is it put into circulation? Why is stable money so important and what role does the central bank play in this regard?

Answers to these questions and many more can be found in this school book. It provides detailed information on cash, book money and banks, the euro and the Eurosystem, the monetary and financial system, and monetary policy of the euro area.

This school book is suitable for classroom use at the upper secondary level, as basic information at the lower secondary level, and as a reference work for anyone else keen on learning more. For each chapter lesson templates are available.

The school book is provided by the Bundesbank in german language free of charge. It can be ordered as a single copy or as a class set via our order portal.

Status: Spring 2019

Chapter 1

FUNCTIONS AND FORMS OF MONEY

Chapter 2

CASH

Chapter 3

BANKS AND BOOK MONEY

Chapter 4

THE EURO AND THE EUROSYSTEM

Chapter 5

THE VALUE OF A STABLE CURRENCY

Chapter 6

EUROSYSTEM MONETARY POLICY

Chapter 7

INTERNATIONAL MONETARY AND FINANCIAL SYSTEM

1. Functions and forms of money

  1. 1. Functions and forms of money
  2. 1.1 The role of money in an economy based on the division of labour
  3. 1.2 Functions of money
  4. 1.3 The changing face of money through the ages
  5. Key points
Chapter 1
Chapter 1

2. Cash

  1. 2. Cash
  2. 2.1 Cash issuance
  3. 2.2 The cash cycle in Germany
  4. 2.3 The euro banknotes
  5. 2.4 The euro coins
  6. 2.5 Using security features to spot counterfeit money
  7. Key points
Chapter 2
Chapter 2

3. Banks and book money

  1. 3. Banks and book money
  2. 3.1 Banks and their tasks
  3. 3.2 Cashless payments systems
  4. 3.3 Money supply
  5. 3.4 Money creation
  6. Key points
Chapter 3
Chapter 3

4. The euro and the Eurosystem

  1. 4. The euro and the Eurosystem
  2. 4.1 The road to the euro
  3. 4.2 Eurosystem, ECB and ESCB
  4. 4.3 The governance framework for a stable currency
  5. 4.4 The European banking union for stable financial markets
  6. Key points
Chapter 4
Chapter 4

5. The value of a stable currency

  1. 5. The value of a stable currency
  2. 5.1 Price stability, inflation, deflation
  3. 5.2 Measuring general price developments
  4. 5.3 The benefits of price stability
  5. 5.4 Monetary policy objective: 2%
  6. Key points
Chapter 5
Chapter 5

6. Eurosystem monetary policy

  1. 6. Eurosystem monetary policy
  2. 6.1 How monetary policy works
  3. 6.2 The monetary policy strategy
  4. 6.3 Monetary policy instruments
  5. 6.4 Backing up monetary policy
  6. Key points
Chapter 6
Chapter 6

7. International monetary and financial system

  1. 7. International monetary and financial system
  2. 7.1 Currency and exchange rate
  3. 7.2 The balance of payments as a reflection of international interlinkages
  4. 7.3 The financial system
  5. 7.4 Stability of the financial system
  6. 7.5 International institutions and bodies for monetary and financial stability
  7. Key points
Chapter 7
Chapter 7

Chapter overview

Overview publications

Important links