Fluctuations

Stylized Facts IS-LM Labor Markets AS-AD

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.

— John Maynard Keynes

Economics 302: Macroeconomic Analysis

The IS-LM Model

Background:

Blanchard, chapter 3 (pp. 58–61); chapter 5 (pp. 92–108); chapter 15 (pp. 317–320, 322–326); chapter 17 (pp. 356–360).

Analysis:

"A Working Model," The Economist, August 11, 2005. [PDF format]
"Sticky Situations," The Economist, November 9, 2006. [PDF format]

In The News:

Uchitelle, Louis. "Cost-Cutting Can Start a Ruinous Circle," New York Times, August 25, 2002.
Postrel, Virginia. "Is War a Generator of Expenses or an Economic Stimulus?" New York Times, March 27, 2003.
Wolf, Martin. "Big Spenders Keep the Economy Moving," Financial Times, April 27, 2004.

Going Further:

Friedman, Milton. "John Maynard Keynes," Federal Reserve Bank of Richmond Economic Quarterly, Spring 1997, pp. 1–24.
Romer, David. "Keynesian Macroeconomics without the LM Curve," Journal of Economic Perspectives, vol. 14, no. 2 (Spring 2000), pp. 149–169.
Romer, David. "The New Keynesian Synthesis," Journal of Economic Perspectives, vol. 7, no. 1 (Winter 1993), pp. 5–22.