The IS-LM model, which illustrates the intersection of the real economy (goods market) and the monetary economy (money market), was developed by John Hicks and Alvin Hansen as a mathematical interpretation of the theories of ___.
- India Debt Resolution Company Ltd (IDRCL)
- lending (or credit)
- Capital
- John Maynard Keynes
Answer: John Maynard Keynes
While Keynes published his revolutionary 'General Theory' in 1936, it was highly conceptual and literary. Hicks and Hansen formalized Keynes's ideas into the IS (Investment-Savings) and LM (Liquidity preference-Money supply) framework, creating the foundational macroeconomic model used to analyze the effects of fiscal and monetary policy on national income and interest rates.