3 over the business cycle. But the elimination of the multiplier means also that large responses of output, as in a substantial recession, require large impulses; hence, it again becomes important to identify the kinds of shocks that typically matter for aggregate fluctuations I think that the desire to find observable, aggregate shocks motivated many Keynesians--although not Keynes nor many of his immediate followers--to assign a substantial weight to monetary disturbances as a source of the business cycle. Within a framework where prices adjust slowly and output is determined by aggregate demand, it is easy to conclude that an increase in money raises output and also leads gradually to a higher price level Moreover, the positive correlation between money and output--and perhaps between the price level and output--showed up in some data During the 1960s and early 1970s, Keynesian analysis became increasingly identified with this Phillips curve- view of the world. Thus, this analysis also lost considerable prestige when the Phillips curve disappeared in the mid 1970s; the rise in unemployment along with the increasing rate of inflation was difficult to explain in this kind of model. New Keynesians have,however,demonstrated their flexibility by arguing that the old ynesian model merely need to be patched up to incorporate the supply side Bu argument does not work. In a single market, one can think of qua as determined by demand with the excess supply rationed--as in the Keynesian model--so that changes in quantity depend only Then if this situation applies to the majority of markets, one can generate orthodox Keynesian prescriptions for demand-oriented governmental policies Alternatively, quantity in a typical market could be determined by supply with the excess demand rationed--as in markets subject to effective price