I will be teaching the intro macro chapter on monetary policy and the role of the Fed in a few weeks. For the 4 years or so I've been teaching I've always had concerns about the best way to teach 'the money' chapter because, frankly, most all of the 'money' chapters I've seen in many intro texts (Mankiw, Case, Hall, etc) really could be torn from the book's binding and probably the students would be better off.
I hate how the 'money' chapter discusses the role and makeup of the Fed while ignoring its history (why we have it, etc.) and comparing to how other economies in the past and present model their financial systems.
I hate how the 'money' chapter just nonchalantly shrugs off any discussion of endogeneity of money by saying explicitly, "it doesn't matter because either way the Fed is who influences interest rates." Of course the laughable absurdity of that statement hits me on so many levels since that statement implies something as true that is not at all always true in dynamic time-space, it implies aggregation of interest rates into 'the interest rate' is just a simplifying assumption, it implies that money demand is lesser or just not important - and it implies that the forms that money demand takes (as a positive force for growth or as a negative force that creates boom/bust cycles and instability) are unnecessary to know. Finally it implies 'money' as defined by circulated currency and demand deposits is the only thing that matters - any notion of credit demand or money created through credit demand is ignored. In sum, these chapters absurdly perpetuate the fallacy of composition and the idea that aggregation and simplification are wholly beneficial to learning and understanding our financial system.
Basically, the 'money' chapter can be said to teach a misleading (and now outdated) view of the role of the Fed, combined with the completely ridiculous and fallacious ideas of what is important about our financial system. The only thing students seem to take away from this chapter is that what's important is the ability for the Fed to create money via our fractional reserves system.
So now my dilemma. Over the last few years I've tried to teach from the text, and supplement with some basic concepts of uncertainty and its effect on money demand and our financial institutions. I've supplemented some basic Austrian ideas of how the Fed may be dynamically perpetuating mal-investments.
But I'm sick of saying one thing and having my text book say and focus on something completely different. Should I just ignore the chapter completely and risk my students missing a question or so on the Departmental final, should I present my concerns to Sr. professors, or should I just keep doing what I'm doing? It's getting to the point where I not only feel its a detriment to the students, but I literally feel ashamed when I teach the 'money' chapter. Does it have to be this way?