lecture7theis-lmmodel(宏观经济学(南开大学,龚刚)

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1、MacroeconomicsLecture7TheIS-LMModelI.IntroductionTheobjectiveintegratethepreviouslydiscussedtwomodels:themodelsforproductmarket,andthemodelformoneymarketanddiscusshowoutputandinterestratearedetermined.I.IntroductionWhyIS-LMThemodelpresentedinthislectureisoftencalle

2、dtheIS-LMmodelIS:meaningsavingandinvestment,representingtheequilibriuminproductmarket.LM:meaningliquidityandmoney,representingtheequilibriuminthemoneymarket.II.InvestmentDeterminationWhyNeedInvestment?InLecture5,wehaveassumedthatinvestmentisautonomousandissimplygiv

3、en.Foracompletemodelofoutputdetermination,weneedtodiscusshowinvestmentisdetermined.Itisalsoinvestmentthatconnectsthemodelofproductandthemodelofmoneymarket.II.InvestmentDeterminationTheinvestmentdeterminationThisisoneofthemostcomplicatedissueinmacroeconomics.Empiric

4、ally,theinvestmentfunctionisthemostdifficultonetobeestimated.II.InvestmentDeterminationTheinvestmentdetermination(continued)Youcanlistasmanyaspossiblefactorsthatcouldaffectinvestment:TechnicalprogressExpectedmarketconditioninthefutureFinancialresourceGovernmentpoli

5、cyInvestmentenvironmentII.InvestmentDeterminationInvestmentandinterestrateThereisnodoubtthatinvestmentshoulddependoninterestrate.Ifinterestrateincrease,investmentshoulddecrease.Thiscanbeconsideredfromthefollowingfigureregardingtherateofreturnsonthevariousinvestment

6、projectsII.InvestmentDeterminationInvestmentandinterestrate(continued)II.InvestmentDeterminationInvestmentfunctionI=f(i,…)where.Seethefigureinthenextpage.II.InvestmentDeterminationInvestmentfunction(continued)II.InvestmentDeterminationRemarksontheinterestrateItisbe

7、ttertounderstandtheinterestrateintheinvestmentfunctionheretobetheloaninterestrate.Thisisdifferentfromtheinterestrateasdiscussedinthelastlecture,thebondinterestrate.II.InvestmentDeterminationRemarksontheinterestrate(continued)Therecanbemanyinterestratesintherealworl

8、dBondinterestrateLoaninterestrate(primerate)DiscountfactorFederalfundrateII.InvestmentDeterminationRemarksontheinterestrate(continued)Basicassump