Model Makroekonomi Analisis IS-LM

Kelas Agribisnis 5 Desember 2011

Proses Penentuan Kegiatan Ekonomi

Pasar Barang: IS

Pasar Uang: LM

Kebijakan Fiskal

Interaksi IS dan LM Menentukan suku Bunga di kedua pasar

Kebijakan Moneter

Penentuan Kegiatan Ekonomi: Y dan i pada keseimbangan

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Analisis Equilibrium: Analisis IS dan LM

Asumsi: (ditentukan oleh tingkat bunga)

1. Investasi swasta adalah induced

A E

2. Permintaan Uang ditentukan oleh 3 motif

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Kurva IS

Kombinasi antara berbagai pendapatan Kurva IS mempunyai slope miring

kebawah (downward sloping)

pada kemungkinan berbagai tingkat bunga

Kemiringan dari kurva IS ditentukan oleh

elastisitas tingkat bunga terhadap investasi.

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Terbentuknya kurva IS

Melalui analisis Keynesian Melalui Investasi + G = Saving +Tax

( empat kudran)

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Tingkat bunga dan AD

Need to modify the AD function of the last chapter to reflect the new planned
investment spending schedule

= [ C + cT R + c(1 t )Y ] + ( I bi) + G + NX = A + c(1 t )Y bi

An increase in i reduces AD for a given level of income At any given level of i, can determine the equilibrium level of income and

AD = C + I + G + NX

output as in Chapter 9 A change in i will change the equilibrium

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The Interest Rate and AD: The IS Curve

Derive the IS curve using figure 10-5
(2)
For a given interest rate, i1,

the last term in equation (2) is constant can draw the AD function with an intercept of

The equilibrium level of income is Y1 at point E1 Plot the pair (i1, Y1) in the bottom panel as point E1 a point on the IS curve Combination of i and Y that clears the goods market
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A D = A + c(1 t )Y bi

(2)

Derive the IS curve using figure

10-5
Consider a lower interest rate, i2 Shifts the AD curve upward to

AD with an intercept of

Given the increase in AD, the

equilibrium shifts to point E2, with an associated income level of Y2 Plot the pair (i2, Y2) in panel (b) for another point on the IS curve

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 We can also derive the IS curve using the goods

market equilibrium condition:
Y = AD = A + c(1 t )Y bi Y c(1 t )Y = A bi Y (1 c(1 t )) = A bi Y = G ( A bi )
(5) (4)

where

1 G = (1 c(1 t ))

, the multiplier
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Bentuk Kurva IS

IS Y

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Pergeseran Kurva IS
Pergeseran komponen-komponen AD
Ketika komponen AD (C,I,X-m) bergeser ke atas maka kurva IS bergerak ke kanan atas dan sebaliknya

Pergeseran kebijakan fiskal pemerintah

Ketika ekspansi kebijakan fiskal (pengeluaran pemerintah) menyebabkan kurva IS bergeser ke kanan atas dan sebaliknya.

Dampak pergeseran terhadap keseimbangan pendapatan

tergantung pada besarnya dampak multiplier yang tercipta

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Equilibrium in the IS-LM Model

The IS curve represents equilibrium in the goods market. Y = C (Y T ) + I ( r ) + G
r LM

The LM curve represents r 1 money market equilibrium.

M P = L ( r ,Y )
The intersection determines the unique combination of Y and r that satisfies equilibrium in both markets.
Y1

IS Y

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Policy analysis with the IS-LM Model

Y = C (Y T ) + I ( r ) +G

r LM

M P = L ( r ,Y )
Policymakers can affect macroeconomic variables r1 with fiscal policy: G and/or T monetary policy: M We can use the IS-LM model to analyze the effects of these policies.
Y1

IS Y

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An increase in government purchases

1. IS curve shifts right

1 by G 1 MPC causing output & income to rise.

r LM
2.

r2 r1
1.

2. This raises money

demand, causing the interest rate to rise so the final increase in Y 1 is smaller than G 1 MPC
3.

IS 2 IS 1 Y

3. which reduces investment,

Y1 Y2

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A tax cut
Because consumers save (1 MPC) of the tax cut, the initial boost in spending is smaller for T than for an equal G and the IS curve shifts by MPC 1. T 1 MPC
2. so the effects on r and Y

r LM r2 2. r1
1.

IS 1 Y1 Y2
2.

IS 2 Y

are smaller for a T than for an equal G .

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Monetary Policy: an increase in M

1. M > 0 shifts the LM curve down (or to the right) 2. causing the interest rate to fall 3. which increases investment, causing output & income to rise.

LM 1 LM 2

r1 r2 IS Y1 Y2 Y

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Interaction between monetary & fiscal policy

Model:
monetary & fiscal policy variables (M , G and T ) are exogenous

Real world:
Monetary policymakers may adjust M in response to changes in fiscal policy, or vice versa.

Such interaction may alter the impact of

the original policy change.
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The Feds response to G > 0

Suppose Congress increases G . Possible Fed responses: 1. hold M constant 2. hold r constant 3. hold Y constant In each case, the effects of the G
are different:

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Response 1: hold M constant

If Congress raises G , the IS curve shifts right If Fed holds M constant, then LM curve doesnt shift. Results:
r LM 1 r2 r1 IS 2 IS 1 Y1 Y2

Y = Y 2 Y 1 r = r 2 r 1

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Response 2: hold r constant

If Congress raises G , the IS curve shifts right To keep r constant, Fed increases M to shift LM curve right. Results:
r LM 1 r2 r1 IS 2 IS 1 Y1 Y2 Y3 LM 2

Y = Y 3 Y 1 r = 0

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Response 3: hold Y constant

If Congress raises G , the IS curve shifts right To keep Y constant, Fed reduces M to shift LM curve left. Results:
r r3 r2 r1 IS 2 IS 1 Y1 Y2 LM 2 LM 1

Y = 0 r = r 3 r 1

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Shocks in the IS-LM Model

IS shocks: exogenous changes in the demand for goods & services.
Examples: stock market boom or crash change in households wealth C change in business or consumer confidence or expectations I and/or C

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Shocks in the IS-LM Model

LM shocks: exogenous changes in the demand for money.
Examples: a wave of credit card fraud increases demand for money more ATMs or the Internet reduce money demand

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IS-LM and Aggregate Demand

So far, weve been using the IS-LM model
to analyze the short run, when the price level is assumed fixed.

However, a change in P would shift the

LM curve and therefore affect Y .

The aggregate demand curve

(introduced in chap. 9 ) captures this

relationship between P and Y

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Deriving the AD curve

r

Intuition for slope of AD curve: P M/P ) ( LM shifts left r I

LM(P2 ) LM(P1 )

r2 r1

IS
P

Y2

Y1

P2 P1 AD Y2 Y1
Y
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Monetary policy and the AD curve

The Fed can increase aggregate demand: M LM shifts right r I Y at each value of P
P r

LM(M1 /P1 ) LM(M2 /P1 )

r1 r2

IS Y1 Y2
Y

P1 AD2 AD1 Y
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Y1

Y2

Fiscal policy and the AD curve

Expansionary fiscal policy (G and/or T ) increases agg. demand: C T IS shifts right Y at each value of P
P r

LM IS2 IS1 Y1 Y2
Y

r2 r1

P1 AD2 AD1 Y
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Y1

Y2

IS-LM and AD-AS in the short run & long run

Recall from Chapter 9:
The force that moves the economy from the short run to the long run is the gradual adjustment of prices. In the short-run equilibrium, if then over time, the price level will rise fall remain constant

Y > Y Y < Y Y = Y

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The SR and LR effects of an IS shock

r
LRAS LM(P ) 1

A negative IS shock shifts IS and AD left, causing Y to fall.

IS2

IS1
Y
SRAS1

Y
P P1
LRAS

AD1 AD2 Y
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The SR and LR effects of an IS shock

r
LRAS LM(P ) 1

In the new short-run equilibrium, Y < Y

IS2

IS1
Y
SRAS1

Y
P P1
LRAS

AD1 AD2 Y
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The SR and LR effects of an IS shock

r
LRAS LM(P ) 1

In the new short-run equilibrium, Y < Y

IS2

IS1
Y
SRAS1

Over time, P gradually falls, which causes SRAS to move down M/P to increase, which causes LM to move down

Y
P P1
LRAS

AD1 AD2 Y
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The SR and LR effects of an IS shock

r
LRAS LM(P ) 1

LM(P2)

IS2

IS1
Y
SRAS1 SRAS2

Over time, P gradually falls, which causes SRAS to move down M/P to increase, which causes LM to move down

Y
P P1 P2
LRAS

AD1 AD2 Y
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The SR and LR effects of an IS shock

r
LRAS LM(P ) 1

This process continues until economy reaches a long-run equilibrium with Y =Y

P P1 P2

LM(P2)

IS2

IS1
Y
SRAS1 SRAS2

Y
LRAS

AD1 AD2 Y
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Efektifitas Kebijakan Fiskal

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Efektifitas Kebijakan Fiskal

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Efektifitas Kebijakan Moneter

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Efektifitas Kebijakan Moneter

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