Money Multipliers and the Slopes of IS and LM: Comment

Cebula, Richard (1984): Money Multipliers and the Slopes of IS and LM: Comment. Published in: Southern Economic Journal , Vol. 51, No. 3 (31 January 1985): pp. 906-908.

Abstract

This theoretical model investigates the implications of the slopes of LM curves and positively sloped IS curves for the size of policy multipliers. It is shown that the effectiveness of monetary policy is greater if the slope of the IS curve is greater. It also is shown that fiscal policy effectiveness is greater the flatter the LM curve is.

• Item Type: MPRA Paper
• Language: English
• Keywords: positively sloped IS curve; monetary policy effectiveness; fiscal policy effectiveness; public finance
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation

References

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2. Cebula, Richard J. “A Brief Note on Economic Policy Effectiveness,” Southern Economic Journal, October 1976, 1174-6.

3. Meyer, Paul A. “Money Multipliers and the Slopes of IS and LM,” Southern Economic Journal, July 1983.

4. Silber, William L. “Monetary Policy Effectiveness: The Case of the Positively Sloped IS Curve,” Journal of Finance, December 1971, 1023-31.

5. Steindl, Frank. “Giffen Goods, IS Curves, and Macroeconomic Stability,” Metroeconomica, June 1970, 165-9.

6. Wang, Leonard F.S. “IS-LM Stability and Economic Policy Effectiveness: Further Observations,” Journal of Macroeconomics, Spring 1980, 181-3.