Aggregate Demand: Setting the Stage for Demand-Side Stabilization


This chapter marks the first step toward the construction of the ISLM–ADAS model which will power macroeconomic analyses in the chapters to come. At this stage we have completed an intuitive overview of the broad links between global capital flows, fiscal and trade imbalances, and their effects on interest rates and exchange rates.


Interest Rate Monetary Policy Aggregate Demand Good Market Money Market 


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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Rutgers Business SchoolRutgers UniversityNewarkUSA

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