In the U.S., the Great Recession was fought with traditional monetary and fiscal policies,
During the 1960s, Keynesian economic policies led to lower unemployment rates and
In the 1970s, the U.S. economy saw sharp changes in real GDP and in the price level. This
presented a challenge to policymakers and to economists because these outcomes could not be explained by a Keynesian analysis.
During the 1970s when the U.S. experienced rising inflation and unemployment, economists began to reconsider the significance of aggregate supply as well.