Macroeconomic model reference
Loanable Funds Model
The supply of savings meets the demand for investment at an equilibrium real interest rate. When households save more, the supply curve shifts right and the rate falls; when firms want to invest more, the demand curve shifts right and the rate rises.
Theory-based models · Derivation
Loanable Funds derivation: assumptions and equations
Trace the Loanable Funds derivation through assumptions, notation, equations, and failure cases.