Editing Macroeconomic model (section)

===Simple theoretical models===
Simple textbook descriptions of the macroeconomy involving a small number of equations or diagrams are often called ‘models’.  Examples include the [[IS-LM model]] and [[Mundell–Fleming model]] of [[Keynesian economics|Keynesian]] macroeconomics, and the [[Neoclassical growth model|Solow model]] of [[Neoclassical economics|neoclassical]] [[Economic growth|growth theory]]. These models share several features. They are based on a few equations involving a few variables, which can often be explained with simple diagrams.<ref>Blanchard, Olivier (2000), ''Macroeconomics'', 2nd ed., Chap. 3.3, p. 47. Prentice Hall, {{ISBN|0-13-013306-X}}.</ref> Many of these models are [[Comparative statics|static]], but some are [[Dynamical system|dynamic]], describing the economy over many time periods. The variables that appear in these models often represent macroeconomic aggregates (such as [[GDP]] or total [[employment]]) rather than individual choice variables, and while the equations relating these variables are intended to describe economic decisions, they are not usually derived directly by aggregating models of individual choices. They are simple enough to be used as illustrations of theoretical points in introductory explanations of macroeconomic ideas; but therefore quantitative application to forecasting, testing, or policy evaluation is usually impossible without substantially augmenting the structure of the model.