Effectiveness of Monetary Policy: IS-LM Curves, Economist’s Views and Limitations

The question of effectiveness of monetary policy has three aspects- technical, theoretical and practical, (a) Technically the IS and LM curves serve as analytical tools for explaining the effectiveness of monetary policy. (b) Theoretically relativeness of monetary policy in comparison with fiscal policy is discussed by examining Keynesian and monetarist view on the subject, (c) Practically, various limitations or the [...]