Basically I'm interested in solving tricky thought provoking exercises based on National income and on IS LM model. I've read mankiw but it didn't satisfy my needs.
I would suggest:
1) Macroeconomics by Dornbusch and Fisher.
2) Macroeconomics by Richard Froyen
3) The Economics of money and financial markets by Mishkin.
Between the first two books that is Dornbusch and Fischer and Richard Froyen, I am indifferent. Both are equally good and the only difference is that Dornbusch and Fischer has a slightly more mathematical rigor whereas Froyen is a more story like engaging macroeconomics narrative with fair amount of mathematics.
If you need a truly engaging book, then go for Mishkin. But I will suggest don't read Mishkin as the first book to understand macroeconomics.
Here are two Modern Monetary Theory (MMT) experts on the IS-LM model:
MMT core economist Stephanie Kelton is a bit more polite but no less devastating in her March Bloomberg article entitled, The Clock Runs Down on Mainstream Keynesianism:
The IS-LM framework is a gadget that will often align with sensible real-world analysis. It may perform better than a stopped clock, but it is no match for MMT.
Here is the original architect of the I S-LM model, John Hicks, from a 1980 article in the Journal of Post Keynesian Economics:
I accordingly conclude that the only way in which the I S-LM analysis usefully survives — as anything more than a classroom gadget, to be superseded, later on, by something better – is in application to a particular kind of causal analysis, where the use of equilibrium methods, even a drastic use of equilibrium methods, is not inappropriate.
This is also quoted on page 465 in the new Macroeconomics textbook by William Mitchell, et. al.
Based on the above, I believe it is fair to say that MMT itself considers the IS-LM model to be fatally flawed.
UPDATE: I agree that instead of just saying “it’s bad” that there should be details of why. I will look into it and add them.