Abstract
IS-LM was originally devised as a way of interpreting the core of the theory in Keynes’ General Theory of Employment, Interest and Money and showing the differences between that theory and the theories of those that Keynes, in an admitted solecism, called classical economists (GT, p. 3).1 The IS-LM model was so successful that for a generation of economists, and many generations of undergraduates, it became “Keynesian” economics as far as the conventional wisdom was concerned. However, some of Keynes’ closest followers repudiated IS-LM analysis; Joan Robinson going so far as to call it bastard Keynesianism (1975, p. 128). Hicks himself, in later life, thought that, as an explanation of what Keynes was saying, IS-LM
“succeeded perhaps only too well. For it is no more than a part of what Keynes was saying, or implying, that can be represented in that manner, and it was easy to take it as the whole”. (1982, p. 100).
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© 2016 Joseph Halevi, G. C. Harcourt, Peter Kriesler and J. W. Nevile
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Nevile, J.W. (2016). What Keynes Would Have Thought of the Development of IS-LM. In: Post-Keynesian Essays from Down Under Volume I: Essays on Keynes, Harrod and Kalecki. Palgrave Macmillan, London. https://doi.org/10.1057/9781137475381_5
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