Setting up a Keynesian cross model in Excel

Miles B. Cahill, College of the Holy Cross
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This material is replicated on a number of sites as part of the SERC Pedagogic Service Project
Initial Publication Date: October 14, 2010


In this assignment, students are guided through the process of setting up a standard Keynesian cross model in Microsoft Excel. Excel is used to solve for GDP (and other variables) using the "iteration" option so the model is entered just as it appears in a textbook. Students are then asked to use the spreadsheet to explore the model by answering a series of questions.

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Learning Goals

Students gain a better understanding of the basic Keynesian cross model, and in particular how the terms interact with each other. They also learn some basic spreadsheet modeling skills.

Context for Use

This is designed for principles-level macroeconomics courses. It may be used in a computer laboratory setting or as a take-home assignment.

Description and Teaching Materials

Below find an instruction sheet in Word format for completing the assignment. The instruction sheet is tailored for distributing to students. In addition, an Excel file containing the completed assignment is provided.
Instruction sheet (Microsoft Word 34kB Jun24 10)
Excel file containing completed assignment (Excel 17kB Jun24 10)

Teaching Notes and Tips

The instructions should make the assignment easy to implement. It make take some time to de-bug the spreadsheet, so it may be best to complete the assignment in a lab session.


The completed assignment may be handed in for grading electronically or in a print-out form.

References and Resources