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Team Teaching
Dept. Islamic Economics
Faculty of Economics and
Business
Airlangga University

Pasar Barang

slide 1
In this session, you will learn
the IS curve, and its relation to
the Keynesian cross
the loanable funds model
slide 2
Kurva IS adalah :
kombinasi tingkat bunga dan tingkat pendapatan
yang konsisten dengan ekulibrium dalam pasar
barang dan jasa
slide 3
The Keynesian Cross
A simple closed economy model in which income
is determined by expenditure.
(due to J.M. Keynes)
Notation:
I = planned investment
E = C + I + G = planned expenditure
Y = real GDP = actual expenditure
Difference between actual & planned expenditure
= unplanned inventory investment
slide 4
Elements of the Keynesian Cross
( ) C C Y T =
I I =
, G G T T = =
( ) E C Y T I G = + +
= Y E
consumption function:
for now, planned
investment is exogenous:
planned expenditure:
equilibrium condition:
govt policy variables:
actual expenditure = planned expenditure
slide 5
Graphing planned expenditure
income, output, Y
E
planned
expenditure
E =C +I +G
MPC
1
slide 6
Graphing the equilibrium condition
income, output, Y
E
planned
expenditure
E =Y
45

slide 7
The equilibrium value of income
income, output, Y
E
planned
expenditure
E =Y
E =C +I +G
Equilibrium
income
slide 8
An increase in government purchases
Y
E
E =C +I +G
1
E
1
= Y
1
E =C +I +G
2
E
2
= Y
2
AY
At Y
1
,
there is now an
unplanned drop
in inventory
so firms
increase output,
and income
rises toward a
new equilibrium.
AG
slide 9
Solving for AY
Y C I G = + +
Y C I G A = A + A + A
MPC = A + A Y G
C G = A + A
(1 MPC) A = A Y G
1
1 MPC
| |
A = A
|

\ .
Y G
equilibrium condition
in changes
because I exogenous
because AC = MPC AY
Collect terms with AY
on the left side of the
equals sign:
Solve for AY :
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The government purchases multiplier
Example: If MPC = 0.8, then
Definition: the increase in income resulting from a
$1 increase in G.
In this model, the govt
purchases multiplier equals
1
1 MPC
A
=
A
Y
G
1
5
1 0.8
A
= =
A
Y
G
An increase in G
causes income to
increase 5 times
as much!
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Why the multiplier is greater than 1
Initially, the increase in G causes an equal increase
in Y: AY = AG.
But |Y |C
further |Y
further |C
further |Y
So the final impact on income is much bigger than
the initial AG.
slide 12
An increase in taxes
Y
E
E =C
2
+I +G
E
2
= Y
2
E =C
1
+I +G

E
1
= Y
1
AY
At Y
1
, there is now
an unplanned
inventory buildup
so firms
reduce output,
and income falls
toward a new
equilibrium
AC = MPC AT
Initially, the tax
increase reduces
consumption, and
therefore E:
slide 13
Solving for AY
Y C I G A = A + A + A
( )
MPC = A A Y T
C = A
(1 MPC) MPC A = A Y T
eqm condition in
changes
I and G exogenous
Solving for AY :
MPC
1 MPC
| |
A = A
|

\ .
Y T
Final result:
slide 14
The tax multiplier
def: the change in income resulting from
a $1 increase in T :
MPC
1 MPC
A
=
A
Y
T
0.8 0.8
4
1 0.8 0.2
A
= = =
A
Y
T
If MPC = 0.8, then the tax multiplier equals
slide 15
The tax multiplier
is negative:
A tax increase reduces C,
which reduces income.
is greater than one
(in absolute value):
A change in taxes has a
multiplier effect on income.
is smaller than the govt spending multiplier:
Consumers save the fraction (1 MPC) of a tax cut,
so the initial boost in spending from a tax cut is
smaller than from an equal increase in G.
slide 16
Exercise:
Use a graph of the Keynesian cross
to show the effects of an increase in planned
investment on the equilibrium level of
income/output.
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The IS curve
def: a graph of all combinations of r and Y that
result in goods market equilibrium
i.e. actual expenditure (output)
= planned expenditure
The equation for the IS curve is:
( ) ( ) Y C Y T I r G = + +
slide 18
Y
2
Y
1
Y
2
Y
1
Deriving the IS curve
|r |I
Y
E
r
Y
E =C +I (r
1
)+G
E =C +I (r
2
)+G
r
1
r
2
E =Y
IS
AI
|E
|Y
slide 19
Why the IS curve is negatively
sloped
A fall in the interest rate motivates firms to
increase investment spending, which drives up
total planned spending (E ).
To restore equilibrium in the goods market,
output (a.k.a. actual expenditure, Y )
must increase.
slide 20
The IS curve and the loanable funds
model
S, I
r
I (r )
r
1
r
2
r
Y
Y
1
r
1
r
2
(a) The L.F. model (b) The IS curve
Y
2
S
1
S
2
IS

slide 21
Fiscal Policy and the IS curve
We can use the IS-LM model to see
how fiscal policy (G and T ) affects
aggregate demand and output.
Lets start by using the Keynesian cross
to see how fiscal policy shifts the IS curve
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Y
2
Y
1
Y
2
Y
1
Shifting the IS curve: AG
At any value of r,
|G |E |Y
Y
E
r
Y
E =C +I (r
1
)+G
1

E =C +I (r
1
)+G
2

r
1
E =Y
IS
1

The horizontal
distance of the
IS shift equals

IS
2

so the IS curve
shifts to the right.
1
1 MPC
A = A

Y G
AY
slide 23
Exercise: Shifting the IS curve
Use the diagram of the Keynesian cross or
loanable funds model to show how an increase
in taxes shifts the IS curve.
slide 24
Pasar Barang
dalam Perspektif Islam
Suku bunga diganti dengan bagi hasil, sehingga
insentif dalam melakukan investasi adalah
besarnya bagi hasil.
Bagi hasil yang menjadi daya tarik investor untk
melakukan investasi merupakan share
keuntungan yang dibagi kepada investor dan
pengelola
slide 25
Model IS Fahim Khan
Permintaan investasi di pasar barang
dipengaruhi oleh ketersediaan sumber daya
yang mendukung kegiatan investasi,
keuntungann yang akan didapat dari usaha,
adanya modal, sumber daya manusia yang
memiliki kemauan dan kemampuan
kewirausahan dengan memeperhitungkan risk
and return tertentu.
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Besarnya keuntungan diukur dengan standar
upah minimum.
Kesediaan seorang enterpreneur bergerak di
bidang bisnis tergantung besarnya resiko dan
keuntungan, dimana penjumlahan secara
simultan besarnya resiko dan keuntungan
minimal sama dengan besarnya upah minimum.

slide 27
Selain itu, untuk mendapatkan keuntungan
tertentu dipengaruhi oleh besarnya modal yang
digunakan untuk berinvestasi.
Untuk mencapai profit setara dengan upah
minimum dibutuhkan investasi sebesar (Io).
Investasi akan menghasilkan keuntungan
maksimum, jika modal investasi terus
ditambah.Namun setelah mencapai maksimum,
penambahan investasi akan menurunkan profit.

slide 28
P
0
Im
I
Rm
slide 29
Permintaan Investasi secara agregat
dipengaruhi oleh permintaan investasi pada
tingkat mikro, dimana investasi tingkat mikro
dipengaruhi oleh ekspektasi keuntungan dan
bagi hasil yang diharapkan oleh pemilik dana.
slide 30
Total expected profits (P)
Po
Qo
Io
Level of Investment
A
B
slide 31
Kurva A menunjukkan tingkat ekspektasi
keuntungan yang diharapkan dari kegiatan
entrepreneurship.
Investasi meningkat, P juga meningkat, sampai
pada suatu titik dimana investasi menghasilkan
keuntungann yang semakin menurun.
Kurva B dilihat dari perspektif pemilik dana, yaitu
semakin besar tingkat investasi, semakin besar
tingkat profit yang diharapkan.
slide 32
Dari gambar di atas diturunkan rasio bagian keuntungan pemilik
dana dengan total keuntungan investasi (a). Nilai a disebut dengan
rasio profit sharing.
Semakin besar nilai a, semakin besar investasi yang masuk.
Tingkat investasi nasional dipengaruhi oleh : (a), tingkat keuntungan
investasi di negara tsb,banyaknya kegiatan investasi di negara tsb,
banyaknya kegiatan investasi di sektor riil, dan iklim kondusif
investasi.
CHAPTER 10 Aggregate Demand I
slide 33
Kurva IS dalam Ekonomi Islam

a




Y
slide 34
Hubungan yang terjadi antara a dan Y
menggambarkan keseimbangan pasar dalam
ekonomi Islam.
Hubungan ini bersifat negatif, karena naiknya
niali a berarti meningkatnya share bagi pemilik
dana sehingga akan menurunkan motivasi
berinvestasi.Jika a meningkat, investasi akan
menurun, turunnya investasi secara agregat
akan menurunkan output nasional.
slide 35
JAZAKUMULLAH KHOIRON KATSIRO
CHAPTER 10 Aggregate Demand I