- There are rational reasons behind why prices and wages are sticky
- New Keynesian analysis is consistent with the pro-cyclical behavior of employment as well as pro-cyclical consumption, investment, government expenditures and productivity
- The non-neutrality of money in the new Keynesian models is consistent with the fact that money is procyclical and leading
- More controversial is the New Keynesian prediction that inflation will tend to be procyclical and lagging (emphasizing aggreagte demand distrubances)
- Unlike the old Keynesian models, they do not imply a countercyclical real wage. When sticky nominal prices are introduced, the real wage can be procyclical or acyclical