Keynesian stimulus is often justified by 'wage stickiness', which is a theory that nominal wages are very slow and unlikely to adjust down; the stimulus causes

Keynesian stimulus is often justified by 'wage stickiness', which is a theory that nominal wages are very slow and unlikely to adjust down; the stimulus causes inflation and devalues real wages, by increasing the money supply.[1] Please note that this is not my belief, but it is supported by some empirical evidence, and is widely held in some circles. [1] http://en.wikipedia.org/wiki/Keynesian_economics#Wages_and_spending http://en.wikipedia.org/wiki/Keynesian_economics#Wages_and_s...