IS-LM Framework and Policy Analysis: Understanding Economic Interactions
The IS-LM framework is a foundational model in macroeconomics used to analyze the interaction between the real economy and the money market. Developed by John Hicks and Alvin Hansen, it combines the Investment-Saving (IS) curve and the Liquidity Preference-Money Supply (LM) curve to determine equilibrium in both the goods and money markets. The IS-LM framework … Read more