Unlike growth theory, which enjoys strong consensus built around the Solow Model, undergraduate teaching of short-run fluctuations is characterized by a wide diversity of models and perspectives. This leads to an immediate and critical pedagogical choice for an undergraduate macro course: reveal the sharply conflicting views of various schools of macroeconomic thought or teach a single, core model that is flexible enough to incorporate a range of policy positions.

The ISLMADAS Model presented in this book and screencasts adheres firmly to the latter option. As the epigraph to this chapter states, the single-model approach was favored by the roughly one hundred macroeconomists who gathered at a conference on the intermediate macroeconomics course in 1994. Although highlighting conflict can be exciting and intellectually stimulating, the costs in the classroom are quite high: “it is too expensive to teach a new set of equations and the rules for manipulating them” (Erekson et al. 1996, 101). In a course with a few weeks on fluctuations, teaching more than one model, such as Keynesian and real business cycle models, seems to err on the side of breadth over depth. The likely outcome for an undergraduate student exposed to a blizzard of contradictory statements is a mix of confusion and certainty that macroeconomists have no idea what they are taking about.

A Practical Pan-Macro Model

While not able to provide a taste of a modern macro model based on optimizing agents, the ISLMADAS Model allows for a wide continuum of policy possibilities. After all, the model says nothing about elasticities of various relationships nor speed of adjustment. With respect to policy, it easily reflects the views of leftist Keynesians and rightist monetarists and anyone in between, comfortably including the heterogeneous schools of modern macro under one umbrella. It gives, therefore, the undergraduate student a single model with which to intelligently discuss and interpret the news and policy debates of the day.

This applied orientation and policy flexibility is key to the ISLMADAS Model's amazing survival. Born as ISLM to convey inscrutable ideas presented in The General Theory, ADAS was grafted on in the 1970s as stagflation destroyed the Keynesian consensus.