Charles I. Jones, a professor of UC-Berkeley, wrote a new macroeconomics textbook. I haven't read it yet, but what caught my eye in this contents is that it has no LM curve.
We usually use IS curve and LM curve when explaining the short-run equilibrium of the economy as a whole. LM curve stands for the equilibrium of money market, while IS curve expresses that of goods market in the economy as a whole.
I'm not sure how this text teaches the short-run equilibrium, but I hear that recent macroeconomics puts emphasis on the monetary policy rule(interest rate rule) made by the policymaker of central bank. In my conjecture, this text implies that the short-run equilibrium will be determined by such policy rule that the policymakers make.
Anyway, let me think about it for a while, and I found the related paper written by Charles's colleague, David H. Romer.
2 comments:
It is extremely interesting for me to read the blog. Thanx for it. I like such themes and anything connected to them. I would like to read a bit more soon.
It was very interesting for me to read this post. Thanks for it. I like such topics and everything connected to them. I would like to read a bit more on that blog soon.
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