The Is Model Of Macroeconomics

The celebrated IS, or goods market equilibrium, model of macroeconomics3 in its non-stochastic form can be expressed as

Consumption function:

Ct--

- ßo

+

ßi Ydt 0 <ßi < 1

(18.2.7)

Tax function:

Tt--

= ao

+

aiYt 0 < ai < 1

(18.2.8)

Investment function:

It~-

= Y0

+

Yirt

(18.2.9)

Definition:

Ydt--

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