ECONOMIC POLICY OF SUSTAINABLE DEVELOPMENT BASED ON IS-LM-EE MODEL

Economic development is closely related to environmental quality. Environmental quality has become an important influencing factor to restrict the economic development. But environment quality is facing an ordeal owing to the pollution of the soil and water, greenhouse gas, extreme climate and natural disasters. It is one of the research focuses of scholars how to realize a harmonious development of economic and environmental by using fiscal and monetary policy tools. We revise the IS-LM-EE schedule model in the existing literature and discuss the stability conditions and the policy signification of the equilibrium point of the IS-LM-EE schedule model. We research the optimal fiscal and money policy combination at the equilibrium point of the IS-LM-EE model.