Dullien, Sebastian - In: Intervention. Zeitschrift fuer Ökonomie / Journal of … 03 (2006) 2, pp. 279-304
In standard macroeconomic models (new classical, AS-AD, monopolistic competition etc.) monetary policy determines the price level. Output and employment are determined in the labour market where nominal wages are set (possibly under the influence of unions), which together with the price level...