IS-LM and Modern Macroeconomics

1. Front Matter

   Pages i-ix

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2. Introduction: Quo Vadis IS-LM?

   • Warren Young, Ben Zion Zilberfarb

   Pages 1-6

3. Old, New and Post Keynesian Perspectives on the IS-LM Framework: A Contrast and Evaluation

   • Huw Dixon, Bill Gerrard

   Pages 7-28

4. Post Walrasian Macroeconomics and IS/LM Analysis

   • David Colander

   Pages 29-42

5. IS-LM and Aggregate Demand: A Restatement

   • David F. Heathfield

   Pages 43-56

6. How to Construct is and LM Curves in the Spirit of Hicks or, Why We do not Need the Aggregate Demand Curve

   • Ingo Barens

   Pages 57-76

7. On ‘Money’ in ISLM and AD/AS Models

   • Colin Rogers, T. K. Rymes

   Pages 77-90

8. IS-LM and Leijonhufvud’s Re-Appraisal

   • Bruce Littleboy

   Pages 91-105

9. IS-LM and Macroeconometric Models

   • Bert G. Hickman

   Pages 107-120

10. Macroeconomics without IS-LM: A Counterfactual

    • Robert W. Dimand

    Pages 121-131

11. What Keynes Would Have Thought of the Development of ISLM

    • J. W. Nevile

    Pages 133-149

12. The IS-LM Model: Its Role in Macroeconomics

    • L. R. Klein

    Pages 151-159

13. Back Matter

    Pages 161-166

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IS-LM is perhaps the prime example of `cognitive dissonance' in economics, and is problematic to many economists. On the one hand, the IS-LM model is still taught by many academic economists or they use it to derive the AD-AS approach. On the other hand, the same economists realize the limitations of the basic IS-LM model and would not now use it for policy analysis, as they did in the past. The distinction between pedagogical and analytical efficacy is made by all the authors in this volume regarding the IS-LM model. Indeed, even those who would reject using the model for modern policy analysis still see the basic model as useful for teaching purposes. Moreover, in an augmented form, some of the authors in this volume would even see fit to use IS-LM for modern policy analysis. As will be seen, therefore, the IS-LM model is `not yet dead'. Rather, the model's `plasticity' has enabled it to undergo a metamorphosis into augmented form, enabling its continuing utilization in economics accordingly.

• IS-LM
• Keynes
• econometrics
• macroeconomics

• Department of Economics, Bar Ilan University, Israel

  Warren Young, Ben Zion Zilberfarb

Policies and ethics