... Although a static model like the Classic has its downfalls, it is in important indicator of market forces, and is once again gaining popularity as a "Neo-classical" model after its long refutation by Keynesian economists. Classical economics held that the two types of economic variables, nominal and real, exist independently, resulting in this dichotomy of the Classical model. Classical economist Pigou compared this characteristic of nominal capital to a "veil" necessary to look beyond to find the real forces propelling the economy. Money is just a tool to facilitate the barter within an economy and it influences merely the nominal price level and the level of money wages. The nominal money stock has no true affect on real variables, such as output, real interest rates and unemployment, or the real health of the economy. The Classical interpretation gives little importance for the government and its ability to manage the economy. ...

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