However, since labor cannot simply be laid off, labor productivity will decline. The opposite occurs during an economic expansion. 2  For details, see Nicholas G. Mankiw, Mankyū keizaigaku II makuro-hen, 3rd ed., trans. Adachi Hideyuki, Ishikawa Jota, Ogawa Eiji, Jinushi Toshiki, Chuma Hiroyuki, and Yanagawa Takashi (Tokyo: Toyo Keizai Inc., 2014), 374, 397. Originally published as Principles of Economics, 6th ed.
(Mason, Ohio: South-Western Cengage Learning, 2012), 650, 665. According to Mankiw, in the long run, changes in the amount of money have important effects on nominal variables such as price levels, but only negligible effects on real variables such as real GDP. He adds that, although monetary policy is neutral in the long run (i.e.