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Poole’s Stochastic IS-LM Model and Optimal Monetary Policy Rule: A Framework for Graduate Teaching

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  • Amaresh Das

Abstract

Our comment revisits Poole’s popular exposition of the IS-LM model and proceeds to extend the discussion to best derive the optimal monetary policy rule. The key assumption is that the economy is closed with no transactions in goods and capital. This will help us better understand the basic working of the macro economy.

Suggested Citation

  • Amaresh Das, 2012. "Poole’s Stochastic IS-LM Model and Optimal Monetary Policy Rule: A Framework for Graduate Teaching," Journal of Education and Vocational Research, AMH International, vol. 3(4), pages 127-131.
    • Handle: RePEc:rnd:arjevr:v:3:y:2012:i:4:p:127-131
    DOI: 10.22610/jevr.v3i4.59
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    References listed on IDEAS

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    1. William Poole, 1969. "Optimal choice of monetary policy instruments in a simple stochastic macro model," Special Studies Papers 2, Board of Governors of the Federal Reserve System (U.S.).
    2. Robert G. King, 1993. "Will the New Keynesian Macroeconomics Resurrect the IS-LM Model?," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 67-82, Winter.
    3. William Poole, 1970. "Optimal Choice of Monetary Policy Instruments in a Simple Stochastic Macro Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(2), pages 197-216.
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