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s instantaneously.

Wage and price are sticky and other market failures appear in New Keynesian models, indicate that the economy might be unsuccessful to get full employment. Therefore, New Keynesians argued that macroeconomics were stabilized by the government (using fiscal policy) or by the central bank (using monetary policy) could lead to a more competent macroeconomic consequence than a laissez faire policy (Gordan, 1990 ).

New Keynesian economists completely agreed with New Classical economists that in the long run, changes in the money supply are neutral. However, due to prices are sticky in the New Keynesian model, an increase in the money supply does increase output and make unemployment lower in the short run.

Monetarism 货币主义
It is able to simultaneously incorporate both inflation and unemployment into an analysis.

The natural rate of unemployment is determined inside the labour market and any attempt to reduce unemployment below the natural rate will only work in the short run. Once expectations of inflation have been revised the economy will revert to the EAPC. Moreover, continual attempts to reduce unemployment using expansionary fiscal and/or monetary policy will simply fuel inflation. Therefore, the optimal macroeconomic strategy for governments is to only control inflation. The natural rate may fall or rise. It depends upon the level of competitiveness inside the labour market (Mulhearn, 2009).

Unemployment may arise inside the labour market. Friedman's analysis of the cause of inflation is complemented by his notion of the natural rate of unemployment. Monetarist argued that governments should just keep to a monetary rule in order to do what is within their competence - control inflation.

New Classical Economics 新古典经济学
Some assumptions are common to most New Classical models. First, all agents are assumed to be infinitely lived, rational and possess rational expectations. At any time, the macroeconomics are assumed to have a unique equilibrium at full employment or potential output and this equilibrium is assumed to always had been achieved via price and wage adjustment (Kirman, 1989).

It is known that expansionary policy could reduce the unemployment below the natural rate but only until agents adjusted their behaviour to consider new expected rates of inflation. Similarly, contractionary policy could reduce inflation but at the temporary cost of unemployment above the natural rate (Kirman, 1992).

Findings 调查结果
UK
In 1993, the economy of the UK was hard hit and the unemployment rate increased a lot. In 1980s, the government implemented deflationary fiscal policy which caused the unemployed go up again. In 1990s, the Labour Government carried out the reform of welfare and employment policy so that the overall unemployment rate showed a downward trend (Zhang, 2004).

Germany
The reasons why the unemployment rate of Germany is high are that there are active and passive unemployment. Active unemployment is that when worker finds the job which is just above the level of benefits, but well-being is reduced. It results in reduction in workers' real income so that they do not want to go to work. Passive unemployment is that high efficiency and the minimum wage standard, coupled with the natural rate of unemployment that it has a higher unemployment rate.
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