The myth or story regarding the creation of the IS-LM model in the economics profession goes something like this. Keynes correctly showed in the General Theory that you could not specify the rate of interest just from the supply of savings and demand for investment schedules alone because this...

The major error made in the history of economic thought concerning Keynes's General Theory is the false belief that he was a Marshallian who would only use partial equilibrium analysis and would NEVER use systems of simultaneous, mathematical equations .Of course, Keynes was very critical in the...

In August 1937, Keynes discovered that Pigou, with the very explicit and rabid support of Dennis Robertson, was planning on publishing a paper in the Economic Journal which deployed the same type of Marshallian, partial equilibrium,ceteris paribus (constant money income) analysis with functions...

F. Modigliani presented a special case of Keynes's General Theory result in 1944 in his “Liquidity Preference and the Theory of Interest and Money”. Modigliani sought to provide the IS-LM model of Hicks's 1937 Econometrica interpretation of Keynes's chapter 15 IS-LM model with microeconomic...