Econbrowser

Nice reading list!

Don't know whether you have room, but consider the following....

Under 3, why not
Philip Swagel, "The Financial Crisis: An inside view" Brookings Papers on Economic Activity, forthcoming.
and in the classroom, consider
Mack, John. 2009. Inside the Bunker: CEO John Mack on Saving Morgan Stanley. Webcast and case October 14. http://knowledge.wharton.upenn.edu/article.cfm?articleid=2357.

Under 4, consider
Honohan, Patrick and Daniela Klingebiel, The fiscal cost implications of an accommodating approach to banking crises, Journal of Banking & Finance, vol. 27, no. 8, 2003, 1539-1560.

Under 6.1, a useful perspective might be
Laurence Ball, Douglas W. Elmendorf, N. Gregory Mankiw, The Deficit Gamble, Journal of Money, Credit and Banking, 1998, Vol.30(4), 699-720.

Finally, do you want to put into perspective the economic cost and fiscal cost of this financial crisis compared to other crises? There's a couple of more recent IMF papers on this of late, as well as work by Reinhart and Rogoff.

On IS/ LM
Let us try to probe test the maths that Keynes did not write.
An homogeneous linear function and:
The only essential difference is that investment spending now depends on the interest rate. The
coefficient b is the interest sensitivity of investment. Since income now depends on interest rates,which is endogenous, then solving equations (1)-(8) yields an equation of a line.

Income dispersion index
http://www.shadowstats.com/article/consumer-liquidity-special-report
Fixed private investment
http://research.stlouisfed.org/fred2/series/FPI

Difficult to see much linearity in the results and yet the Fed funds rates are at lowest
http://research.stlouisfed.org/fred2/series/DFF?cid=118
And yet M2 M3 have been rising for quite a while
http://research.stlouisfed.org/fred2/series/M2ASL
http://www.shadowstats.com/alternate_data/money-supply-charts.
Could it be a better applicable theory,when BOP,IS,LM,employment are either in equilibrium or close to equilibrium?
A theory close to Better smoke a good cigar in 1st class than a cigarette butt in second class?

Simon van Norden: Excellent suggestions. I did assign Swagel's piece in the Spring (and in fact Phill Swagel came and talked to my master's level course!).