The point is that excess demand can remain material in the economy long after the underlying shock has gone. 5  Here I am referring to the New Keynesian style models as described in, for example, Woodford, M. (2003). Interest and Prices: Foundations of a Theory of Monetary Policy.
Princeton University Press; and Benes, J, A Binning, M Fukac, K Lees, T Matheson (2009) K.I.T.T. : Kiwi Inflation Targeting Technology, Reserve Bank of New Zealand.