An IS-LM Representation of Macroeconomic Equilibria with Rationing

  • Pierre-Yves Hénin
  • Philippe Michel
Part of the Keynesian Studies book series (KST)


The historical and pedagogical importance of the IS-LM scheme for the development of moderm macroeconomics suggests that we should consider it as a reference model which may be used to assess new instruments of macroeconomic analysis. A. D’Autume (1980) has shown rigorously that the IS-LM approach remains valid when applied to the analysis of Keynesian unemployment under conditions of equilibrium with rationing. J. P. Danthine and M. Peytrignet (1981) proposed an extension of the IS-LM framework to different disequilibrium configurations, but in fact their work is exclusively concerned with a reformulation of the general model of supply and demand. J. P. Benassy (1982) demonstrates the importance of certain flexibility hypotheses for a study of this kind, but his work does not explicitly consider different regimes for the formulation of IS and LM curves. H. Snessens (1981) appeals to an IS-LM representation, but considers IS as an inequality rather than an equilibrium condition. It seems possible to proceed along the path suggested by these investigators to show how an appropriate generalisation of the IS and LM curves produces a real reformulation of the concept of macroeconomic equilibrium with rationing.


Excess Demand Consumption Good Full Employment Investment Good Money Balance 
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© Association pou le Dévelopment des Etudes Keynésiennes 1988

Authors and Affiliations

  • Pierre-Yves Hénin
  • Philippe Michel

There are no affiliations available

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