Rethinking the IS in IS-LM: adapting Keynesian tools to non-Keynesian economies Part 2
The IS-LM diagram was developed as a tool for analyzing Keynesian economies-economies with sticky prices and myopic households. In Part 1 of this article, Evan Koenig showed how a graphical apparatus similar to the traditional IS-LM diagram can be used to analyze economies with a fixed capital stock and optimizing, forward-looking households. Part 2 extends the earlier analysis to an economy with capital investment. As before, an expectations-augmented variant of the IS-LM model is found to include a popular real-business-cycle model as a special case. Thus, the IS-LM diagram has wide applicability as a pedagogical device and as a framework within which to discuss policy.
Volume (Year): (1993)
Issue (Month): Dec ()
|Contact details of provider:|| Web page: http://www.dallasfed.org/Email: |
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- De Long, James Bradford & Summers, Lawrence H, 1986.
"Is Increased Price Flexibility Stabilizing?,"
American Economic Review,
American Economic Association, vol. 76(5), pages 1031-44, December.
- John Y. Campbell & N. Gregory Mankiw, 1989.
"Consumption, Income, and Interest Rates: Reinterpreting the Time Series Evidence,"
NBER Working Papers
2924, National Bureau of Economic Research, Inc.
- John Y. Campbell & N. Gregory Mankiw, 1989. "Consumption, Income and Interest Rates: Reinterpreting the Time Series Evidence," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 185-246 National Bureau of Economic Research, Inc.
- Robert G. King, 1993. "Will the New Keynesian Macroeconomics Resurrect the IS-LM Model?," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 67-82, Winter.
- James Tobin, 1991.
"Price Flexibility and Output Stability: An Old Keynesian View,"
Cowles Foundation Discussion Papers
994R, Cowles Foundation for Research in Economics, Yale University, revised Sep 1991.
- James Tobin, 1993. "Price Flexibility and Output Stability: An Old Keynesian View," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 45-65, Winter.
- Hall, Robert E, 1988.
"Intertemporal Substitution in Consumption,"
Journal of Political Economy,
University of Chicago Press, vol. 96(2), pages 339-57, April.
- Andrew B. Abel & Olivier J. Blanchard, 1982.
"An Intertemporal Model of Saving and Investment,"
NBER Working Papers
0885, National Bureau of Economic Research, Inc.
- repec:fth:harver:1435 is not listed on IDEAS
- Evan F. Koenig, 1993. "Rethinking the IS in IS-LM: adapting Keynesian tools to non-Keynesian economies Part 1," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Sep, pages 32-50.
When requesting a correction, please mention this item's handle: RePEc:fip:fedder:y:1993:i:dec:p:17-35. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Delia Rodriguez)The email address of this maintainer does not seem to be valid anymore. Please ask Delia Rodriguez to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.