This book is devoted to a systems-theoretical presentation of the main results of applying the systemic yoyo model and relevant analytical tools to the topics of money and financial institutions. The author presents the main concepts and results of the subject matter in the language of systems science, which has in the past century prompted revolut

Dr. Jeffrey Yi-Lin Forrest, also known as Yi Lin, holds all his educational degrees (BS, MS, and PhD) in pure mathematics from Northwestern University (China) and Auburn University (USA) and had one year of postdoctoral experience in statistics at Carnegie Mellon University (USA). Currently, he is a guest and specially appointed professor in economics, finance, systems science, and mathematics at several major universities in China, including Huazhong University of Science and Technology, National University of Defense Technology, Nanjing University of Aeronautics and Astronautics, and a tenured professor of mathematics at the Pennsylvania State System of Higher Education (Slippery Rock campus). Since 1993, he has been serving as the president of the International Institute for General Systems Studies, Inc. Along with various professional endeavors he organized, Dr. Forrest has had the honor to mobilize scholars from over 80 countries representing more than 50 different scientific disciplines.
Over the years, he has served on the editorial boards of 11 professional journals, including Kybernetes: The International Journal of Cybernetics, Systems and Management Sciences, Journal of Systems Science and Complexity, International Journal of General Systems, and Advances in Systems Science and Applications. And, he is the editor of the book series entitled "Systems Evaluation, Prediction and Decision-Making", and the editor of the book series "Communications in Cybernetics, Systems Science and Engineering", both published by Taylor and Francis with the former since 2008 and the latter since 2011.

Some of Dr. Forrest's research was funded by the United Nations, the State of Pennsylvania, the National Science Foundation of China, and the German National Research Center for Information Architecture and Software Technology.

Professor Jeffrey Forrest's professional career started in 1984 when his first paper was published. His research interests are mainly in the area of systems research and applications in a wide-ranging number of disciplines of the traditional science, such as mathematical modeling, foundations of mathematics, data analysis, theory and methods of predictions of disastrous natural events, economics and finance, management science, philosophy of science, etc. As of the end of the summer of 2013, he had published over 300 research papers and over 40 monographs and edited special topic volumes by such prestigious publishers as Academic Press, Elsevier, Kluwer Academic, Springer, Taylor and Francis, Wiley, World Scientific, and others. Throughout his career, Dr. Jeffrey Forrest's scientific achievements have been recognized by various professional organizations and academic publishers. In 2001, he was inducted into the honorary fellowship of the World Organization of Systems and Cybernetics.

PART 1
Preparation

1 Overview
1.1 The basics of money
1.1.1 The meaning and function of money
1.1.2 Different kinds of money
1.2 Why is a systemic approach important?
1.2.1 A two-dimensional spectrum of knowledge
1.2.2 The systemic yoyo model
1.3 Problems investigated using systems thinking and methodology
1.3.1 Problems systems science could address
1.3.2 Is 1 + 1 = 2 universally true?
1.3.3 How modern science resolves problems?
1.4 Main results of this book

2 The yoyo mode: Properties and justifications
2.1 Properties of systemic yoyos
2.1.1 The field structure
2.1.2 The quark structure of systemic yoyos
2.2 Laws on state of motion
2.2.1 The first law on state of motion
2.2.2 The second law on state of motion
2.2.3 The 3rd and 4th laws on state of motion
2.2.4 Validity of figurative analysis?
2.3 Theoretical justifications
2.3.1 Blown-ups: Moments of transition in evolutions
2.3.2 Mathematical properties of blown-ups
2.3.3 The problem of quantitative infinity
2.3.4 Equal quantitative effects
2.4 Empirical justifications
2.4.1 Bjerknes' circulation theorem
2.4.2 Conservation of informational infrastructure
2.4.3 Silent human communications

PART 2
Domestic financial system: Seen as a closed system

3 The financial infrastructure
3.1 Composition of the financial system
3.2 Monetary standard of currencies
3.3 Definition of money
3.4 Credit
3.5 Financial markets
3.6 The banking system
3.6.1 The modern banking system
3.6.2 The banking business
3.7 Innovation: Livelihood of national financial infrastructure
3.8 Some final remarks

4 Supply and demand of money
4.1 The concept of supply and demand: Two interacting economic forces
4.2 The supply of money
4.2.1 Creation of currency
4.2.2 Monetary multiplier
4.2.3 Money supply models
4.3 The demand of money
4.3.1 Classical quantity theory of money
4.3.1.1 The theory of cash transactions
4.3.1.2 The cash balance theory
4.3.1.3 The income quantity theory
4.3.2 Keynesian demand for money
4.3.3 Further developments of Keynesian theory
4.3.4 Modern quantity theory of money
4.3.5 Empirical tests of money demand
4.3.5.1 Interest rate and demand for money
4.3.5.2 Stability of the demand for money
4.3.5.3 Circulation speed of money
4.4 A few final comments

5 Interest: A factor influencing monetary supply and demand
5.1 Loanable funds
5.2 Liquidity preference
5.3 Interest rate and total output
5.4 Risk structure of interest rates
5.5 Term structure of interest rates
5.6 Market behaviors and response to different-scale investment opportunities
5.7 Some concluding words

6 Monetary policy: Another factor influencing monetary supply and demand
6.1 Goals of monetary policy
6.1.1 Tasks and contents of monetary policy
6.1.2 Goals of monetary policy
6.2 Medium-term goals of monetary policy
6.3 Tools of monetary policy
6.4 Conduction mechanism of monetary policy
6.5 Empirical analysis on the importance of money
6.6 Money and fiscal policies in the IS-LM model
6.6.1 Movement of IS curve
6.6.2 Movement of LM curve
6.6.3 Movement of total output and interest rate
6.6.4 The crowding-out effect
6.7 Inflation
6.7.1 The phenomenon
6.7.2 Price levels of goods
6.7.3 Causes of inflation
6.7.4 Game theory explanation of stagflation phenomena
6.7.5 Dealing with inflation
6.8 Systemic structure of monetary policy

7 Portfolio of assets
7.1 Constant existence of investment opportunities
7.1.1 Economic yoyo flows
7.1.2 A simple model for perfect capital markets
7.1.3 A simple model when capital markets are imperfect
7.2 Interest rates and yields
7.2.1 Present values
7.2.2 Yield to maturity
7.2.3 Prices, rates of return, and yields of bonds
7.3 Factors affecting portfolio choices
7.4 Balance between risk and yields
7.4.1 Diversity of investment
7.4.2 Mean variance utility
7.4.3 Determination of the portfolio proportion
7.4.4 Estimate of the ß coefficient
7.4.5 Portfolio proportions
7.4.6 Asset pricing
7.5 Portfolio selection
7.5.1 Expected yields of portfolios
7.5.2 Demand of assets
7.5.3 Advantages of diversity

PART 3
International financial system: Seen as an ocean of…