Freeman and Kydland (2000) and Cooley and Hansen (1995) find that
introducing money and a transaction technology does not alter the conclusion
as to the importance of TFP shocks. Chari, Kehoe, and McGrattan (2000)
find that nominal contracting does not either. They introduce staggered
nominal contracting into the basic business cycle model and find that in such
worlds, monetary shocks have effects that are persistent but too small to be an
important contributor to business cycle fluctuations. In summary, introducing
monetary factors did not alter Finn’s and my finding that TFP shocks are the
major contributor to business cycle fluctuations in the United States in the
1954–1980 period we consider in our “Time to Build” paper