Chapter 5 Goods and financial Markets: The s-LM Model 且经济学院1
1 Chapter 5 Goods and Financial Markets: The IS-LM Model 0 10 20 30 40 90 91 92 93 94 95 96 97 98 99 00
Topics to be Discussed o 5.1 The Goods Market Equilibrium and s curve o 5.2 Financial markets and M curve o 5.3 Goods and Financial markets:s. LM Model 友学经济学院
Topics to be Discussed 5.1 The Goods Market Equilibrium and IS Curve 5.2 Financial Markets and LM Curve 5.3 Goods and Financial Markets: ISLM Model
5. 1S Curve o The Goods Market Equilibrium o The Demand The Supply o The Goods Market equilibrium and the is Curve Conditions For Equilibrium: I=S(Classical Method) I=e-dR S=-a+(1-b)y 友学经济学院
5.1 IS Curve The Goods Market Equilibrium ❖ The Demand = The Supply The Goods Market Equilibrium and the IS Curve ❖ Conditions For Equilibrium：I=S (Classical Method) I = e − dR S = −a + (1− b)Y
5. 1S Curve S=0.2Y-40 l=260-2000R Conditions For Equilibrium: S=I 0.2Y-40=260-2000R IS Curve: Y=1500-10000R(Classical Method) 友学经济学院
5.1 IS Curve ❖ S = 0.2Y - 40 I = 260 – 2000R ❖ Conditions For Equilibrium： S = I ❖ 0.2Y - 40 = 260 – 2000R ❖ IS Curve ： Y = 1500 – 10000R (Classical Method)
5.1 S Curve Y=1500-10000R R IS Curve 500 0.1 700 0.08 900 0.06 1100 0.04 1300 0.02 700900110013001500 1500 0 友学经济学院
5.1 IS Curve ❖ Y = 1500 – 10000R IS Curve 0 0.02 0.04 0.06 0.08 0.1 0.12 500 700 900 1100 1300 1500 Y Y RR 500 0.1 700 0.08 900 0.06 1100 0.04 1300 0.02 1500 0
How to draw it? R rI r2 Y Y S 45 Y S
How to draw it? R Y S I 450 I IS r1 S r2 I2 I1 S1 S2 Y1 Y2
Imbalance in the goods market R ES E=Y ES S E>Y Y 复具济器院
Imbalance in the goods market R Y IS ED ES I>S E>Y I<S E<Y I=S E=Y
R R IS Curve S R R2 2 Y Y2Y S 45 S2 S Y 复具济器院
R R II YY S S 45 I S R 1 I 1 S 1 Y 1 IS R 2 Y 2 I2 S2 IS Curve
S Curve When Interest Rate=R1,I=11 When Interest Rate=R2, I =2 R R R Y1 Y2 Y1 Y2 复经济学院
S, I Y Y R Y1 Y2 I1 S Y1 I2 Y2 R1 R2 IS When Interest Rate=R1 , I = I1 IS Curve When Interest Rate=R2 , I = I2
5.2LM Curve o Financial Markets Equilibrium Money Demand Money Supply ⊙ LM Curve Conditions For Equilibrium: Ms=Md d =kr -hr M=M MIP=ky-hr 友学经济学院
5.2 LM Curve Financial Markets Equilibrium ❖ Money Demand = Money Supply LM Curve ❖ Conditions For Equilibrium：Ms=Md M s = M0 M P k y hr M k Y hR d d = − = − /