The New Keynesian model assumes that prices and wages are sticky in the short run, meaning they cannot adjust quickly to changes in economic conditions.

The New Keynesian model identifies several factors that contribute to sticky prices and wages, including menu costs, information costs, and contracting costs.

Sticky prices and wages make the Phillips curve flatter because they prevent wages and prices from adjusting quickly to changes in economic conditions, leading to a more gradual trade-off between inflation and unemployment.

The New Keynesian model suggests that both monetary and fiscal policy can be used to stabilize the economy by influencing aggregate demand and inflation.

One of the main criticisms of the New Keynesian model is that it does not fully incorporate the role of expectations in economic decision-making.

John Maynard Keynes developed the concept of the 'liquidity trap' in his book 'The General Theory of Employment, Interest and Money'.

The 'liquidity trap' refers to a situation where interest rates cannot fall below zero and banks, consumers, and businesses are unwilling to spend money, leading to a prolonged economic downturn.

Edmund Phelps developed the concept of the 'New Phillips Curve', which incorporates the role of expectations in the relationship between inflation and unemployment.

The 'New Phillips Curve' is flatter than the traditional Phillips Curve because it incorporates the role of expectations, which can lead to a more gradual trade-off between inflation and unemployment.

George Akerlof developed the concept of the 'sticky information' model, which emphasizes the role of information frictions in economic decision-making.

The 'sticky information' model emphasizes that consumers and businesses do not have perfect information about the economy, each other, or the future, which can lead to inefficiencies and market failures.

Stanley Fischer developed the concept of the 'menu cost' model, which emphasizes the role of costs associated with changing prices in economic decision-making.

The 'menu cost' model emphasizes that firms incur costs when they change prices, such as the cost of printing new menus or updating online price lists.

Neil Wallace developed the concept of the 'contracting cost' model, which emphasizes the role of costs associated with negotiating and enforcing contracts in economic decision-making.

The 'contracting cost' model emphasizes that firms and workers incur costs when they negotiate and enforce contracts, such as the cost of lawyers, time spent negotiating, and the risk of disputes.