TITLE

IYLM: a General Theory-compatible replacement for ISLM

AUTHOR(S)
O'Donnell, Rod; Rogers, Colin
PUB. DATE
January 2016
SOURCE
Cambridge Journal of Economics;Jan2016, Vol. 40 Issue 1, p349
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The ISLM model, introduced in 1936-37 to provide interpretations of Keynes's General Theory, subsequently emerged in its Hicks-Hansen form as the workhorse and 'trained intuition' of post-war macroeconomists. However, ISLM is an essentially orthodox model based on neoclassical foundations and fails completely as an adequate representation of central elements of Keynes's macroeconomic thought. This article proposes IYLM as a replacement for ISLM, the new model being General Theory-compatible in that it is grounded only on key propositions in that work. Its purpose is to contribute, within the constraints of a two-market framework, to the resuscitation of Keynes's macroeconomics as an alternative to the inadequacies of much current macroeconomics. The first part of the article derives the model and argues that those sympathetic to The General Theory can accept the IYLM framework whilst simultaneously rejecting ISLM. The second part shows that Hicks- Hansen ISLM is based on an income-augmented form of orthodox loanable funds theory.
ACCESSION #
112147762

 

Related Articles

  • GENERALIZING THE TWO-SECTOR KEYNESIAN AND NEOCLASSICAL MACROMODELS. Benavie, Arthur // Southern Economic Journal;Jan77, Vol. 43 Issue 3, p1218 

    It is our purpose in this paper to argue that both the Neoclassical and the Keynesian models have defects which may render them inappropriate as analytical tools for analyzing short-run macro behavior.
    In this paper, we generalize both models as instruments for analyzing the short-run. We...

  • EXTIRPATING ERROR CONTAMINATION CONCERNING THE POST-KEYNESIAN ANTI-PASINETTI EQUILIBRIUM. SAMUELSON, PAUL A // Oxford Economic Papers;Apr1991, Vol. 43 Issue 2, p177 

    No abstract available.

  • Macroeconomics Simplified: Understanding Keynesian and Neoclassical Macroeconomics Systems. Maiti, Moinak // South Asian Journal of Management;Jan/Mar2019, Vol. 26 Issue 1, p170 

    No abstract available.

  • LEFT KEYNESIANISM AND CURRENT ANTIMARGINALISM. Osadchaia, I. // Problems of Economics;Sep77, Vol. 20 Issue 5, p3 

    Focuses on the economic theory of left keynesianism as an alternative to the prevailing neoclassical paradigm. Differentiations among the bourgeois political economy; Identification of left keynesianism as the theoretical platform of contemporary antimarginalism; Criticism on the neoclassical...

  • KEYNES AND THE MARSHALL-WALRAS DIVIDE. de Vroey, Michel // Journal of the History of Economic Thought;Jun99, Vol. 21 Issue 2, p117 

    Examines the relationship between the Marshallian and the Walrasian research programs on the interpretation of the Keynesian theory of economics. Characteristics of the Marshallian equilibrium concept; Observation of Keynes that wage earners cannot bargain on the real wage; Assessment of the...

  • Beneath "First Principles": Controversies Within the New Macroeconomics. DeMartino, George // Journal of Economic Issues (Association for Evolutionary Economi;Dec93, Vol. 27 Issue 4, p1127 

    Focuses on the debate on the economic theories of neoclassicism and Keynesianism. Investigation of the principles of Keynesianism; Examination of the ontological and epistomological positions taken in economic science; Discourse on the dynamic model of economic theory; Trajectory of the theory...

  • The Transmission Process and the Relative Effectiveness of Monetary And Fiscal Policy in a Two-Sector Neoclassical Model. Park, Yung Chul // Journal of Money, Credit & Banking (Ohio State University Press);May73, Vol. 5 Issue 2, p595 

    This article compares the statistics generated by two different income-expenditure models for short-run analyses, a Keynesian model and a neoclassical model which assumes a perfectly competitive market. The two models assume the economy consists of households, business firms, and the government....

  • Indeterminacy of macroeconomic equilibrium in a "Post Keynesian New Classical" model. Rosser Jr., J. Barkley // Journal of Post Keynesian Economics;Fall91, Vol. 14 Issue 1, p111 

    This article examines a simple idea that under certain conditions, the neoclassical aggregate supply and aggregate demand curves could coincide. This would suggest a continuum of possible macroeconomic equilibrium, resulting in a severe indeterminacy. This result can be viewed as a manifestation...

  • Business Cycles and Current Economic Analysis. DAGUM, ESTELA BEE // Estudios de Economía Aplicada;dic2010, Vol. 28 Issue 3, p577 

    No abstract available.

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics