A Methodological Critique of New Keynesian and DSGE Models

New Keynesian and DSGE models fail to portray Keynes' insights in many respects. The intention of this paper is to offer a critical review of the so-called New Consensus Macroeconomics related to the understanding of the theoretical underpinning in The General Theory in which money plays a crucial role. The nature of money as having cero elasticity of substitution invalidates the applicability of Walras' Law in disequilibrium and renders the Keynesian unemployment equilibrium hypothesis a theoretical coherent possibility