New Evidence in Terms of Factors That Affect the IS- LM Schedules in the Greek Economy

In this article, we include new evidence in terms of factors that affect the IS- LM schedules in the Greek economy. The whole process will be supported by the devaluation of the exchange rate in order to improve the balance of trade and improve the repayment of the accounting payables. We want that Greece is a net lender and records surplus and not to become net borrower and record a deficit. The IS curve should be used to display the relationship between the different interest rates and national income to achieve equilibrium in the good market. The LM curve should be used to display the relationship of the different short to long-term interest rates and income to achieve equilibrium in the money market. Fiscal policy will move the IS curve to the right in case of expansion and increase of public expenditure and lowering taxes. In contrast, the IS curve will shift to the left in case of contraction in the good market. On the other hand, monetary policy will shift the LM curve to the right when the adopted policy is ease and to the left when the policy is tight. The IS, LM curve and the balance of payments are used together to achieve equilibrium and full employment at a given national income. We will include the Orthodox variables to make sure that the equilibrium is sustained continuously