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IS-LM Model
IS-LM model

The birth of modern macroeconomics is often credited to John Maynard Keynes (1881–1946) and his classic 1936 book The General Theory of Employment, Interest and Money. Keynes's agenda in 1936 was twofold. First, he wanted to save the discipline of economics from being completely dismissed and ridiculed by policy makers and by the general public who were fed up with the neoclassical laissez-faire policy advice that dominated the Great Depression era of the 1920s and the 1930s. Second, Keynes feared the rapid political shift to the far left in Western Europe and the growing sympathy for and admiration of the ideals promoted by communism, not just by the working class but by a certain segment of the bourgeoisie. As a matter of ...

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