Managing the Modern Economy: Econometric Specification

  • Lawrence R. Klein


The legacy of the Keynesian Revolution is a method or an approach to macroeconomic management that attempts largely, but not entirely, to manipulate the level of demand through fiscal and monetary policy instruments in order to achieve economic stabilisation. This has been assumed to mean steady operation of the economy at or near full employment. In the open economy, this approach must be extended to include manipulation of trade policy instruments.


Econometric Model Full Employment Final Demand Modern Economy Economic Management 
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  1. 1.
    Vijaya Duggal, L. R. Klein and M. D. McCarthy, ‘The Wharton Model, Mark III: A Modern IS-LM Construct’, International Economic Review, 15 (Oct 1974) 572–94.CrossRefGoogle Scholar
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    See P. A. Samuelson, ‘The Art and Science of Macromodels over 50 Years’, The Brookings Model: Perspective and Recent Developments, ed. G. Fromm and L. R. Klein (Amsterdam: North Holland, 1975) pp. 2–10.Google Scholar
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© Lawrence R. Klein 1979

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  • Lawrence R. Klein

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