Mych09a - Ch. 9 The IS-LM/AD-AS Model Introduction The...

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Unformatted text preview: Ch. 9 The IS-LM/AD-AS Model Introduction The IS-LM Model The FE schedule The concept The shifting factors The IS schedule The concept The shifting factors The LM schedule The concept The shifting factors Equilibrium Short term Long term 1 2 Introduction With the building blocks introduced so far, it is now time to set up the general framework, to tackle macro-economic issues, that the world expects the economists to deal with. The model is generally referred to as Keynesian , even though its relationship to Keynes is somewhat remote. 3 The model was developed incrementally, full of gaps and imperfections, but it provides at the least a rough road map for reality, that policy makers can use to save the economy. The present Great Recession makes it clear, that there are times governments cannot standby, taking no action . All that the classicals can offer, however valuable, are caveats, not an alternative platform for action....
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This note was uploaded on 03/10/2010 for the course ECON 3140 taught by Professor Mbiekop during the Spring '07 term at Cornell University (Engineering School).

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Mych09a - Ch. 9 The IS-LM/AD-AS Model Introduction The...

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