Une note sur la règle du taux d’intérêt et le rôle de la courbe LM

A note on the interest rate rule and the role of LM curve

Meixing Dai ()

MPRA Paper from University Library of Munich, Germany

Abstract: This note takes part in the debate on the topic “a macroeconomics without LM”. It shows that, when the central bank does not control directly the interest rates on the money and financial markets, LM curve has another role to play than to determine in an endogenous way the money supply when the monetary policy is specified in terms of interest rate rule. In effect, flexible price LM curve makes it possible to specify the expected inflation rate dynamics within an analytical framework generally adopted by the economists defending the idea of abandoning LM in the teaching of the macroeconomics in first cycle.

Keywords: Interest rate rule; flexible price LM curve; monetary policy; expected inflation rate dynamics; macroeconomic stability (search for similar items in EconPapers)
JEL-codes: E43 E51 E52 E58 (search for similar items in EconPapers)
Date: 2003-12, Revised 2009-03
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:13779

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