This kind of macro theory is underrated

 [[{“value”:”Demand shocks as technology shocks: We provide a macroeconomic theory where demand for goods has a productive role. A search friction prevents perfect matching between producers and potential customers. Larger demand induces more search, which in turn increases GDP and measured TFP. We embed the product-market friction in a standard neoclassical model and estimate it
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Demand shocks as technology shocks:

We provide a macroeconomic theory where demand for goods has a productive role. A search friction prevents perfect matching between producers and potential customers. Larger demand induces more search, which in turn increases GDP and measured TFP. We embed the product-market friction in a standard neoclassical model and estimate it using Bayesian techniques. Business cycles are driven by preference shocks, true technology shocks, and investment-specific shocks. Preference shocks have qualitatively similar effects as true productivity shocks. These shocks account for a large share of the fluctuations in consumption, GDP, and measured TFP and can be identified using shopping time data.

That is from a new NBER working paper by Yan Bai, José-Víctor Ríos-Rull, and Kjetil Storesletten.  Aggregate demand matters, but in a context-specific way.  And demand and productivity shocks are part of one general integrated theory.

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 Economics, Uncategorized