This book examines the origins of the IS-LM model, one of the most significant innovations in the history of economic thought. It shows that the complete IS-LM model, including the equations and diagram, was produced by a group of economists who contributed their respective mathematical models of Keynes’s General Theory, including Champernowne, Reddaway, Harrod, and Meade, not to mention Hicks. Furthermore, the book discusses the implications of newly discovered archival material, including a previously overlooked document showing that John Maynard Keynes himself was the first to present the IS-LM model equations in a lecture he gave on December 4, 1933. It focuses on the implications of this material in terms of understanding the evolution of Keynes’s approach from 1933 to 1937, later interpreters of his General Theory, and the ongoing debate between Keynesians and Post-Keynesians on the nature of his system. Given the revelations it presents, this book will transform the profession’s understanding of the origins of the IS-LM model and modern macroeconomics.
Author(s): Warren Young, Edward W. Fuller
Series: Springer Studies in the History of Economic Thought
Publisher: Springer
Year: 2022
Language: English
Pages: 171
City: Cham
Acknowledgments
Contents
1 Introduction, Keynes’s Own IS-LM Approach
References
2 Prolog to Keynes’s IS-LM, 1930 to 1932
2.1 The Failure of A Treatise on Money
2.2 The Treatise and IS-LM: 1930
2.3 Back to the Drawing Board: 1931 and 1932
References
3 The Advent of Keynes’s IS-LM, 1933
3.1 GTE/5/423
3.2 The Monetary Theory of Employment
3.3 Mr. Keynes’s Multiplier
3.4 The Marginal Efficiency of Capital
3.5 Keynes’s 1933 Lectures
References
4 “The Missing Link”: Keynes’s Own Lecture Notes, December 4, 1933, Impact and Implications
4.1 Keynes’s Handwritten IS-LM Model: GTE/5/419
4.2 GTE/5/419 Employment Equations
4.3 The Rashomon Effect
References
5 Reconstructing Keynes’s IS-LM Approach, 1931 to 1937
5.1 1931 to 1933: A Review
5.2 The Mid-1934 Drafts
5.3 The Marginal Efficiency of Capital
5.4 Keynes’s 1934 Lectures
5.5 1935: De-formalizing and Re-formalizing the General Theory
5.6 The General Theory: Extracting the IS-LM Model
5.7 Keynes’s Verbal IS-LM Approach and QJE 1937
5.8 De-formalization: Did Keynes “Do a Marshall?”
References
6 Keynes’s Equations and Early Post-General Theory IS-LM Models
6.1 Bryce, Champernowne, Reddaway, Harrod, and Meade
6.2 Hicks and Lange
6.3 Other Early IS-LM Models
References
7 The Legacy of December 1933: Re-interpreting Mr. Keynes
References
Appendix
Robert B. Bryce Notes: December 4, 1933
Alec Cairncross Notes: December 4, 1933
Marvin Fallgatter Notes: December 4, 1933
Walter Salant Notes: December 4, 1933
Lorie Tarshis Notes: December 4, 1933
Bryn Thring Notes: December 4, 1933
Index
