2008/04/25 by Stephen N. Durlauf, Donald D. Hester · 1 citation
Economics, Econometrics and Finance · #Computer science #Construct (python library) #Diagram #Econometrics #Economic Theory and Policy #Economic theories and models #Economics #Fiscal policy #General equilibrium theory #Idle #Keynesian economics #Macroeconomic model #Macroeconomics #Mathematical economics #Monetary Policy and Economic Impact #Monetary policy
paper · doi:10.1057/9780230226203.0855
openalex publication_date 2008/04/25 · openalex created_date 2022/05/12 · openalex updated_date 2026/06/11
The IS–LM model is a short-run macroeconomic analytical construct for studying an economy with idle productive resources. The diagram has been especially influential because its constituent curves are loci on which the goods market (IS curve) and the money market (LM curve) are respectively in equilibrium, making it possible to infer changes in fiscal policy and monetary policy, both separate and simultaneous. The model is prominent in elementary and intermediate macroeconomic textbooks, yet it fails to accommodate the main features of modern macroeconomic theory, although modern dynamic models are sometimes interpreted as having IS–LM type features.