John Hicks, in his original macroeconomic model, the ISLM model, developed the LM curve to show the
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John Hicks, in his original macroeconomic model, the IS–LM model, developed the LM curve to show the combinations of the real interest rate and output that result in equilibrium in the money market. The LM curve assumes that monetary policy takes the form of the Federal Reserve choosing a target for the money supply. Why would David Romer in 2000 suggest dropping the traditional LM curve and replacing it with the MP curve?
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In conducting monetary policy the Federal Reserve since th...View the full answer
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Related Book For 
Money Banking And The Financial System
ISBN: 1801
3rd Edition
Authors: R. Glenn Hubbard, Anthony Patrick O'Brien
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