Basic equations of model | Equation source | Intermediate target of monetary policy | Policy conclusion | |
Hicks model | (IS) (LM) | ad hoc | Money supply | Short-term demand management Policy effectiveness |
Neoclassical synthesis model | (IS) (LM) , (PC) | ad hoc | Money supply | Short-termdemand management Policy effectiveness in short term Policy ineffectiveness in long term |
Sargent-Wallace model | (IS) (LM) (Lucas AS) | ad hoc | Money supply | Rational expectation Policy ineffectiveness |
IS-LM-NPC Model | (IS) (LM) (NPC) (Taylor Rule) | Optimization | Interest rate | Rational expectation Policy effectiveness Improve status of monetary policy |
IS-MP-NPC Model | (IS) (NPC) (Taylor Rule) | ad hoc | Interest rate | Policy effectiveness Improve status of monetary policy |