Teaching IS-LM macroeconomics through material balance diagrams

Indrajit Thakurata and Susmi Thomas
Additional contact information
Indrajit Thakurata: N/A
Susmi Thomas: N/A

Advances in Economics Education, 2024, vol. 3, issue 1, 76-105

Abstract: This study proposes a material balance approach to teaching the IS-LM model. It introduces an easy-to-visualize box diagram approach for representing goods market equilibrium where all the income and expenditure components are simultaneously visible. Similarly, for the money market, it introduces line diagrams to visually represent the demand and exogenous supply of real liquidity. The material balance diagrams can be used to demonstrate shifts in the IS and LM curves, as well as to show the impact of monetary and fiscal policies on all components of the goods and money markets at the same time. The ability to simultaneously depict the interplay of many variables enables these diagrams to overcome the limitations of two-dimensional graphs.

Keywords: Macroeconomics; IS-LM model; Pedagogy; Visual diagrams (search for similar items in EconPapers)
JEL-codes: A22 A23 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/journals/aee/3/1/article-p76.xml (application/pdf)
Restricted Access

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:aeejrn:v:3:y:2024:i:1:p76-105

Access Statistics for this article

Advances in Economics Education is currently edited by Peter Docherty

More articles in Advances in Economics Education from Edward Elgar Publishing
Bibliographic data for series maintained by Phillip Thompson ().