In Search of a Successor to IS-LM

Jean-Pierre Danthine

Cahiers de Recherches Economiques du Département d'économie from Université de Lausanne, Faculté des HEC, Département d’économie

Abstract: After discussing the general characteristics that the successor to IS-LM should possess, this essay argues that the business cycle research program initiated by Kydland and Prescott (1992) is beginning to show a promising capacity at incorporating a broad range of modeling features into a logically consistent and theoretically satisfactory framework. This ability and the systematic process of model enrichment it permits make it possible to predict that the dynamic General Equilibrium models developed around the neoclassical stochastic growth model - but possibly evolving towards friction-prone non Walrasian models - will become the platform for a new neo-classical synthesis.

Keywords: IS-LM; neo-classical synthesis; short run macroeconomics; business cycle (search for similar items in EconPapers)
JEL-codes: A2 E1 E3 (search for similar items in EconPapers)
Pages: 23 pages
Date: 1997-09
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Citations: View citations in EconPapers (6)

Published in Oxford Review of Economic Policy, vol.13, No.3, 1997, pp. 135-144

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Persistent link: https://EconPapers.repec.org/RePEc:lau:crdeep:9710

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