A (Not So) Textbook Case
Dean Sandeep Mazumder co-authors a more approachable, practical economics textbook
By Justin Walker
When you think of engaging literature, a monetary economics textbook might not be the first item that comes to mind. However, Sandeep Mazumder, the William E. Crenshaw Endowed Dean of the Hankamer School of Business, is doing his part to change that.
Mazumder is the co-author of the textbook, Money, Banking and Financial Markets—A Modern Introduction to Macroeconomics, along with Dale Cline, a CPA in Hickory, North Carolina. The two began working on the project while Mazumder worked at Wake Forest University, with the goal to develop a more practical textbook on monetary economics.
“The typical textbook is teaching the content so the student can complete their assignment and do well on a test,” Mazumder said. “It is good and informative, but it is not as focused on the practical aspect of it.”
Cline brought years of industry experience to the table and a wealth of knowledge on how banks operated from an accounting perspective, Mazumder said. He also recognized that most textbooks were teaching a different operational style for banks and the Federal Reserve than what he experienced in his work.
Cline first reached out to one of Mazumder’s colleagues at Wake Forest to write a textbook on monetary economics. However, early on in the process, the fellow Economics professor quickly realized this was not his level of expertise and recommended Mazumder for the project.
Mazumder received a first version of the textbook, Banking on Confidence: A Guidebook to Financial Literacy, which featured precise content and a solid foundation, he said. He described it as a non-academic version, but was excited about how approachable it was.
Dean Sandeep Mazumder
“We wanted to write it such that a business school student—even if economics was not their field—could pick it up and truly understand it,” Mazumder said. “That made the textbook preparation process a bit different.”
The textbook is divided into two sections. Part I describes how the economy functions, with chapter titles like “Basic Accounting and Financial Statements” and “The Truth Behind Money Creation.” Part II features the applicability of theories within real estate, oil, gold and cryptocurrencies.
“This project was our way to try and bridge a gap between academia and industry,” Mazumder said.
Another unique selling point for this textbook is the authors’ stand on the fractional reserve theory of money creation. The theory suggests that money is created when banks begin loaning money with the deposits of their customers—however, this is not how most banks operate in modern times, Mazumder said.
Mazumder and Cline dispute the theory and endorse the credit creation theory of money, which suggests banks do not require deposits to give out loans. Instead, banks can present loans essentially out of thin air, as long as they are meeting Federal Reserve requirements. The pair are not the first to promote this theory over the fractional reserve theory, but they are on the leading front for textbook appearances.
Mazumder and Cline’s goal for this project was to create a textbook for everyone to read, especially those interested in working in the financial industry. In Mazumder’s opinion, this should be required reading for any MBA student.
“It is a shorter read than the average textbook and that is by design,” Mazumder said. “We are hoping that students in a class might read it but we are also hoping that non-students will read it as well.”