The Supply Side of the Economy Disappeared When John Hicks Introduced IS-LM into Economic Theory

The problem of this approach goes back almost to the beginning of Keynesian macro with John Hicks’ “Mr Keynes and the Classics” (1937). It was this article that introduced IS-LM to economic theory and in which Hicks used the same model of aggregate demand to explain both the classical and Keynesian approach. Yet with the model entirely demand-side, it ought to be obvious that if one were actually to understand what pre-Keynesian economists were attempting to argue, and to do so within their own terms, that it would be impossible to use a model built on variations in demand. With IS-LM the supply side of the economy disappeared.... At no point is there any representation of the supply-side of the economy where decisions to produce are considered. It is demand that will automatically elicit a supply and determines the level of activity.

--Steven Kates, "Why Keynesian Concepts Cannot Be Used to Explain Pre-Keynesian Economic Thought: A Reader's Guide to Classical Economic Theory," Quarterly Journal of Austrian Economics 17, no. 3 (Fall 2014): 320.