"This paper presents a theory of the monetary transmission mechanism in an old-Keynesian model with multiple equilibrium unemployment rates. The model has two equations in common with the new-Keynesian model; the optimizing IS curve and the policy rule. It differs from the new-Keynesian model by replacing the Phillips curve with a belief function to determine expectations of nominal income growth. I estimate the new and old-Keynesian models using U. S. data and I show that the old-Keynesian model fits the data better than its new-Keynesian competitor"--National Bureau of Economic Research web site.