<blockquote>
<p>my question is rather simple but I would like to know why the IS-LM model is still taught in from my experience most undergrad economics classes?</p>
</blockquote>
<p>Yes, it is still being taught and it is actually workhorse model of undergraduate macro. You can see that modern, recent and widely used macro textbooks still heavily rely on it. For example, you can have look at Mankiw Macroeconomics or Blanchard et al Macroeconomics: A European Perspective (probably two most widely used undergraduate textbooks). Both devote several chapters just to IS-LM model, and no other model gets such a wide treatment.</p>
<blockquote>
<p>My understanding is that the model is considered old and even though there exist several extensions, it is not considered relevant in modern economics. But why is it still such an important part of many economics classes?</p>
</blockquote>
<p>The model is considered old, but it is not true it is not considered relevant. In fact according to Olivier Blanchard who is considered one of the world's foremost macroeconomists, IS-LM model is not just relevant, but he even claims that it is the most relevant macro model to teach after the Great Recession in macro classes (See Blanchards blog for Peterson Institute <a href="https://www.piie.com/blogs/realtime-economic-issues-watch/how-teach-intermediate-macroeconomics-after-crisis" rel="nofollow noreferrer">here</a>). Not everyone might be as enthusiastic about IS-LM as Blanchard but I can't think of any serious well-known and respected macroeconomist who would hold position that students should not be taught IS-LM in macro.</p>
<p>Consequently, the model is still relevant. What even more, even if you consider the model irrelevant, it is still extremely useful as modern New Keynesian graduate level models are best understood against backdrop of simple IS-LM model. Thus IS-LM has very high didactic utility, similarly to Newtonian physics that is outdated and just a special case to general relativity, it is easier to expose students first to it and that is big part why it is still taught. Generally, IS-LM is good stepping stone into learning more advanced quasi-Walrasian macro models.</p>

CC BY-SA 4.0
2021-06-08T19:03:25.117Z
2021-06-08T19:03:25.117Z
1muflon1
<p>my question is rather simple but I would like to know why the IS-LM model is still taught in from my experience most undergrad economics classes?
My understanding is that the model is considered old and even though there exist several extensions, it is not considered relevant in modern economics. But why is it still such an important part of many economics classes? - is there more to learn from it?</p>

CC BY-SA 4.0
2021-06-09T03:46:01.290Z
Because it is the best graphical way to understand the complexities of Macro concepts and inter relationships between variables. IS-LM can be extended for any macro model. The point is that usually a macro model models 3 markets so the interaction of 3 equilibria and disequilibria is beautifully captured in ISLM.
Dayne
<teaching>
Why is the IS-LM model taught?
Jacob
# Why is the IS-LM model taught?

(Asked by: username_0 on 2021-06-08)

my question is rather simple but I would like to know why the IS-LM model is still taught in from my experience most undergrad economics classes?
My understanding is that the model is considered old and even though there exist several extensions, it is not considered relevant in modern economics. But why is it still such an important part of many economics classes? - is there more to learn from it?

**Tags:** teaching
> **Comments:**
> **username_1**: Because it is the best graphical way to understand the complexities of Macro concepts and inter relationships between variables. IS-LM can be extended for any macro model. The point is that usually a macro model models 3 markets so the interaction of 3 equilibria and disequilibria is beautifully captured in ISLM.  

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## 1 answers

### Answer by username_2 on 2021-06-08. Score: 1

> my question is rather simple but I would like to know why the IS-LM model is still taught in from my experience most undergrad economics classes?

Yes, it is still being taught and it is actually workhorse model of undergraduate macro. You can see that modern, recent and widely used macro textbooks still heavily rely on it. For example, you can have look at Mankiw Macroeconomics or Blanchard et al Macroeconomics: A European Perspective (probably two most widely used undergraduate textbooks). Both devote several chapters just to IS-LM model, and no other model gets such a wide treatment.

> My understanding is that the model is considered old and even though there exist several extensions, it is not considered relevant in modern economics. But why is it still such an important part of many economics classes?

The model is considered old, but it is not true it is not considered relevant. In fact according to Olivier Blanchard who is considered one of the world's foremost macroeconomists, IS-LM model is not just relevant, but he even claims that it is the most relevant macro model to teach after the Great Recession in macro classes (See Blanchards blog for Peterson Institute [here](https://www.piie.com/blogs/realtime-economic-issues-watch/how-teach-intermediate-macroeconomics-after-crisis)). Not everyone might be as enthusiastic about IS-LM as Blanchard but I can't think of any serious well-known and respected macroeconomist who would hold position that students should not be taught IS-LM in macro.

Consequently, the model is still relevant. What even more, even if you consider the model irrelevant, it is still extremely useful as modern New Keynesian graduate level models are best understood against backdrop of simple IS-LM model. Thus IS-LM has very high didactic utility, similarly to Newtonian physics that is outdated and just a special case to general relativity, it is easier to expose students first to it and that is big part why it is still taught. Generally, IS-LM is good stepping stone into learning more advanced quasi-Walrasian macro models.


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