文档介绍：Chapter 5
Goods and Financial Markets: The IS-LM Model
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Chapter 1
Topics to be Discussed
The Goods Market Equilibrium and IS Curve
Financial Markets and LM Curve
Goods and Financial Markets: IS-LM Model
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Chapter 1
IS Curve
The Goods Market Equilibrium
The Demand = The Supply
The Goods Market Equilibrium and the IS Curve
Conditions For Equilibrium:I=S (Classical Method)
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Chapter 1
IS Curve
S = - 40 I = 260 – 2000R
Conditions For Equilibrium: S = I
- 40 = 260 – 2000R
IS Curve : Y = 1500 – 10000R (Classical Method)
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Chapter 1
IS Curve
Y = 1500 – 10000R
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Chapter 1
How to draw it?
R
Y
S
I
450
IS
I
r1
S
r2
I2
I1
S1
S2
Y1
Y2
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Chapter 1
Imbalance in the goods market
R
Y
IS
ED
ES
I>S
E>Y
I<S
E<Y
I=S
E=Y
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Chapter 1
R
R
I
I
Y
Y
S
S
45
I
S
R1
I1
S1
Y1
IS
R2
Y2
I2
S2
IS Curve
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Chapter 1
S, I
Y
Y
R
Y1
Y2
I1
S
Y1
I2
Y2
R1
R2
IS
When Interest Rate=R1, I = I1
IS Curve
When Interest Rate=R2, I = I2
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Chapter 1
LM Curve
Financial Markets Equilibrium
Money Demand = Money Supply
LM Curve
Conditions For Equilibrium:Ms=Md
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Chapter 1