A[n]... example of this strategy is the "LM curve." Macroeconomics... immortalized Hick's decomposition of the Keynesian system into sub-models. One.… - James Tobin

The important Keynesian insight is that a high propensity to save will not generate high national saving unless it goes into investment, into accumulation of real capital. The "paradox of thrift" makes this point in an extreme way. In certain circumstances, when there is no demand for investment around, the economy can be no better off, or even worse off, if a thrifty public cuts consumption.

[F]or monetary analysis... assign... to each asset a rate of return <math>r_i (i=1,2,... n)</math> and... [imagine] each sector <math> j (j=1,2,... m)</math> to have a net demand for each asset, <math>f_{ij}</math>, which is a function of the vector <math>r_i</math> and possibly of other variables... [I]n practice, many of the cells are empty...

With the publication of J. M. Keynes’s General Theory in 1936 and the mathematical formalizations of his theory by J. R. Hicks (1937) and others, the language of macro-economic theory became systems of simultaneous equations. These are general equilibrium systems of interdependence in the sense that the relationships describe an entire national economy, not just a particular industry or sector. The systems are usually not completely closed; they depend on exogenous parameters including instruments controlled by policy-makers. Seeking definite relationships of economic outcomes to policies and other exogenous variables, qualitative and quantitative, these models sacrifice detail and generality, limiting the number of variables and equations by aggregations over agents, commodities, assets, and time.