We could bring it to the surface by simply appending yesterday's LM curve to today's consensus model. This provides a fourth equation and a fourth variable, the money supply. The LM curve, however, is not part of the simultaneous structure of the expanded model. The first three equations determine output, interest rate, and inflation without calling upon the LM curve.
All the LM curve does is determine the level of the nominal money supply consistent with solutions for output, prices, and the 4  The effect of supply and demand shocks on the evolution of real economic activity is not clear in this specification.