IS/LM needs a bail-out
November 24th, 2008Somebody please defend our cherished models from the likes of this:
The economy needs a boost to aggregate demand and since monetary policy isn’t working any more, fiscal policy has to step in. This is usually followed by drawing a graph with two or three curves on it.
I’m not going to do it, but somebody should.
November 26th, 2008 at 3:19 am
[...] conforms to standard economic theory, but not, by the way, our cherished models1. People that win a lottery will tend to put most of their winnings in savings and only consume a [...]
November 26th, 2008 at 11:29 am
My cherished models are different from your cherished models, I gather
November 26th, 2008 at 1:25 pm
My cherished models are different from our cherished models!