For some twenty-five years after the end of the Second World War, the IS-LM model dominated macroeconomics. Inspired by the work of John Maynard Keynes, this model demonstrates the relationship among savings, income, investments, and interest rates, showing the point at which the interaction of these elements produces “equilibrium” in an economy. With the advent of the new classical macroeconomics in the early 1970s, the dominance of the IS-LM model was effectively challenged. While no longer central to the graduate training of most macroeconomists or to cutting-edge macroeconomic research, the IS-LM model continues to be a mainstay of undergraduate textbooks, to find wide use in applied macroeconomics, and to lie at the conceptual core of most government and commercial macroeconometric models. This volume, the annual supplement to History of Political Economy, explores the rise, the fall, and the persistence of the IS-LM model. In addition to presenting papers from the History of Political Economy conference held at Duke University in April 2003, the volume includes the text of an address delivered at the conference by Nobel laureate Robert E. Lucas Jr., one of the central players in the intellectual movement that dethroned the IS-LM model.

Contributors. Roger E. Backhouse, Mauro Boianovsky, Michael Bordo, David Colander, William Darity Jr., Michel De Vroey, Robert W. Dimand, Kevin D. Hoover, David Laidler, Robert E. Lucas Jr., Edward Nelson, Goulven Rubin, Anna Schwartz, Scott Sumner, Warren Young

Michel De Vroey is Professor of Economics at the Université Catholique de Louvain in Belgium. Kevin D. Hoover is Professor of Economics at the University of California, Davis.

  

  

  

  

1. Introduction: Seven Decades Of The IS-LM Model–Michel De Vroey And Kevin D. Hoover

2. Keynote Address To The 2003 HOPE Conference: My Keynesian Education–
Robert E. Lucas Jr.

3. What Was Lost With IS-LM–Roger E. Backhouse And David Laidler

4. The History Of Macroeconomics Viewed Against The Background Of The Marshall-Walras Divide–Michel De Vroey

5. The IS-LM Model And The Liquidity Trap Concept: From Hicks To Krugman–
Mauro Boianovsky

6. IS-LM-BP: An Inquest–Warren Young And William Darity Jr.

7. James Tobin And The Transformation Of The IS-LM Model–Robert W. Dimand

8. Patinkin On IS-LM: An Alternative To Modigliani–Goulven Rubin

9. IS-LM And Monetarism–Michael D. Bordo And Anna J. Schwartz

10. How Have Monetary Regime Changes Affected The Popularity Of IS-LM?–
Scott Sumner

11. Money And The Transmission Mechanism In The Optimizing IS-LM Specification–Edward Nelson

12. The Strange Persistence Of The IS-LM Model–David Colander

13. Contributors

14. Index