The slower NGDP growth slowed the economy. Money IllusionAnybody can play the semantics game. If nominal means anything at all, then it means something easily rescaled with a calculator. So why do calculations cause economic slow down?
OK, so let's add sticky things.
A whole different issue is the question of how nominal AD shocks get translated into real changes in quantity demanded (those December car sales.) For that you need wage/price stickiness, and Tyler Cowen has a new post that discusses fascinating evidence on wage stickiness in rural India (where you might expect wages to be flexible.)
It is much more likely the sticky thing caused the nominal AD shock. Real shock -> sticky tings -> calculation schocks
The calculation shocks are the real AD shocks, where the firm or household does the weekly totals and goes into shock, seriously, the Krugman Wile Y. Coyote moment.
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