1.   In brief, the mechanisms through which policy makers might bring about a reduction in classical unemployment have not been systematically worked through in most models of temporary equilibrium.

2.   Models of temporary equilibrium attribute the persistence of both classical and Keynesian unemployment to the short-run stickiness of money wages and prices.

3.   In most of the models of temporary equilibrium the only financial asset which is explicitly modelled is the stock of fiat money effectively notes and coin in circulation.

4.   The relationship between these three important variables is supposed to determine the characteristics of a state of temporary equilibrium.

5.   This is hardly surprising since temporary equilibrium models lack a coherently articulated theory of interest which would allow the Keynes effect to be activated.

6.   What is unusual about today, though, is that there is a temporary equilibrium of forces that is making it difficult for any party to force that choice.