IS-LM model

E58352

Keynesian macroeconomic model general equilibrium framework macroeconomic model

The IS-LM model is a macroeconomic framework that depicts the interaction between the goods market and the money market to determine equilibrium output and interest rates.

Jump to: Surface forms Statements Referenced by

Observed surface forms (5)

Surface form	Occurrences
IS curve	1
IS-LM	1
IS-LM-BP model	1
IS–LM model	1
Investment-Saving Liquidity Preference-Money Supply model	1

Statements (51)

Predicate	Object
instanceOf	Keynesian macroeconomic model ⓘ general equilibrium framework ⓘ macroeconomic model ⓘ
abbreviation	IS-LM model self-linksurface differs ⓘ surface form: IS-LM
assumes	closed economy ⓘ fixed price level ⓘ given money supply ⓘ interest-sensitive investment ⓘ liquidity preference for money ⓘ sticky prices in the short run ⓘ
basedOn	Keynesian economics ⓘ The General Theory of Employment, Interest and Money ⓘ
captures	crowding out effect of fiscal policy ⓘ liquidity trap possibility ⓘ transmission mechanism of monetary policy ⓘ
criticizedBy	New Classical macroeconomics ⓘ surface form: New Classical economists real business cycle theory ⓘ surface form: Real Business Cycle theorists
criticizedFor	assuming fixed price level ⓘ neglecting expectations ⓘ static nature ⓘ
describes	interaction between goods market and money market ⓘ
determines	equilibrium interest rate ⓘ equilibrium output ⓘ
developedBy	Alvin Hansen ⓘ John R. Hicks ⓘ surface form: John Hicks
domain	macroeconomics ⓘ
equilibriumCondition	intersection of IS and LM curves ⓘ
extendedBy	IS-LM model self-linksurface differs ⓘ surface form: IS-LM-BP model Mundell-Fleming model ⓘ
fullName	IS-LM model self-linksurface differs ⓘ surface form: Investment-Saving Liquidity Preference-Money Supply model
graphicalRepresentation	two-dimensional diagram with interest rate and output ⓘ
hasComponent	IS-LM model self-linksurface differs ⓘ surface form: IS curve LM curve ⓘ
horizontalAxis	real output ⓘ
introducedBy	John R. Hicks ⓘ surface form: John Hicks
introducedIn	1937 ⓘ
ISCurveRepresents	combinations of interest rate and output where goods market is in equilibrium ⓘ
LMCurveRepresents	combinations of interest rate and output where money market is in equilibrium ⓘ
mathematicalFormulation	system of simultaneous equations for goods and money markets ⓘ
relatedConcept	Keynesian economics ⓘ surface form: Keynesian cross aggregate demand curve ⓘ liquidity preference theory of interest ⓘ
represents	equilibrium in goods market ⓘ equilibrium in money market ⓘ
taughtIn	graduate macroeconomics courses ⓘ undergraduate macroeconomics courses ⓘ
usedFor	analysis of aggregate demand ⓘ analysis of fiscal policy ⓘ analysis of monetary policy ⓘ short-run macroeconomic analysis ⓘ
verticalAxis	interest rate ⓘ

Referenced by (6)

Full triples — surface form annotated when it differs from this entity's canonical label.

IS-LM model → abbreviation → IS-LM model self-linksurface differs ⓘ

this entity surface form: IS-LM

IS-LM model → extendedBy → IS-LM model self-linksurface differs ⓘ

this entity surface form: IS-LM-BP model

IS-LM model → fullName → IS-LM model self-linksurface differs ⓘ

this entity surface form: Investment-Saving Liquidity Preference-Money Supply model

IS-LM model → hasComponent → IS-LM model self-linksurface differs ⓘ

this entity surface form: IS curve

John R. Hicks → knownFor → IS-LM model ⓘ

this entity surface form: IS–LM model

Keynesian economics → usesConcept → IS-LM model ⓘ