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Jeff Nolan's Library tagged economics   View Popular, Search in Google

Dec
16
2011

The gloating is easy to understand.  After all, nominal wage rigidity is the driving assumption of the Keynesian model.  Unemployment is just a labor surplus; since wages are the price of labor, the fundamental cause of unemployment has to be excessive wages.  And as long as the wage rigidity is nominal, you can neutralize it by printing money or otherwise boosting demand.

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