Introduction to Section 2

Section 1 was basically an introduction of the methodology of economic models in general and macroeconomic models in particular. In the first part of the section we concentrated on the derivation of a given framework within which to consider what is commonly known as the income-expenditure type of macroeconomic model. In the context of this framework we then discussed simple versions of both the classical and the Keynesian systems. The distinction between Keynes’ own views and the Keynesian system we presented is important and the discussion of Chapter 8 is taken up again in Chapter 14.