Which of three models would explain involuntary unemployment

Reference no: EM13897681

1. How does the new Keynesian model differ from the earlier Keynesian de?cient-demand model? How does it differ from the modern classical one? Which of the three models would explain involuntary unemployment in a recession following a fall in aggregate demand?

2. "Every major in?ation has been produced by monetary expansion" (Friedman, 1968). Does this assertion hold for the NK model, whose equations do not even include a monetary aggregate as a variable?

Reference no: EM13897681

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