Positive money supply shocks drive interest rates down, boosting real wages.
The article shows that when there is more money available, interest rates go down. The researchers created a model that explains this using two main ideas: money shocks affect different people in different ways, and production inflexibilities cause a big drop in interest rates when there is more money. Unlike other models, this one says that when there is more money, real wages go up. The model also suggests that the government can help smooth out interest rates by adjusting to changes in technology.