Mainstream Economics assumes the monetary system and government policy are some abstract and perfect continuous function. As perfect example the IS/LM curve.

Mainstream Economics assumes the monetary system and government policy are some abstract and perfect continuous function. As perfect example the IS/LM curve. They aren't though, they can radically change the rules anytime they want to throwing years of equations out the window. Imagine the utter theoretical chaos that would be caused if the U.S defaulted on its bonds because Treasuries represent the "Risk free rate of interests" variable present in perhaps thousands of economic models.