https://www.facebook.com/groups/372946956055502/
Don Davis says: "This is one of the first 'toy model' graphs presented in intro macro. It is only as valid as the assumptions underlying it. The rest of macro is largely devoted to dealing with those differences. This approach is consistent with the economic thinking when there was only a rudimentary understanding of macroeconomics - 'what is produced today is tomorrow's income - Say's Law. Keynes developed a much more sophisticated analysis, but did not present it in a simplistic manner using little graphs that over-simplify or irrelevant but impressive and confounding mathematics, though he could do math with the best of them and made major contributions to probability theory. So Hicks and Hansen came up with IS-LM and that became what most thought of as Keynesian economics. Then, when that crude caricature, along with Phillip's unemployment model failed to adequately deal with '70s stagflation, we got a propaganda campaign financed by libertarian billionaires proclaiming that Keynes had been wrong. Bull shit! "