TY - UNPB
T1 - Walras' law and the IS-LM model. A tale of progress and regress.
AU - Klausinger, Hansjörg
PY - 2000
Y1 - 2000
N2 - This paper deals with the integration of Walras' law into Keynesian macroeconomics and the attempts at a consistent specification of period models (beginning- vs. end-of-period-equilibrium). Three examples are examined where neglect of a consistent specification led to erroneous results: (1) the identification of the IS-condition with equilibrium of the "flow market" for bonds, (2) superficial treatments of the liquidity trap, and (3) the assumptions on the stochastic structure of monetary and real shocks in determining the optimal monetary instrument. (author's abstract)
AB - This paper deals with the integration of Walras' law into Keynesian macroeconomics and the attempts at a consistent specification of period models (beginning- vs. end-of-period-equilibrium). Three examples are examined where neglect of a consistent specification led to erroneous results: (1) the identification of the IS-condition with equilibrium of the "flow market" for bonds, (2) superficial treatments of the liquidity trap, and (3) the assumptions on the stochastic structure of monetary and real shocks in determining the optimal monetary instrument. (author's abstract)
U2 - 10.57938/fa79d602-ef49-4a65-9911-3151645a6a5d
DO - 10.57938/fa79d602-ef49-4a65-9911-3151645a6a5d
M3 - WU Working Paper and Case
T3 - Department of Economics Working Paper Series
BT - Walras' law and the IS-LM model. A tale of progress and regress.
PB - Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business
CY - Vienna
ER -