In this very brief article, Blinder first argues for what should remain within the established tradition of teaching economics. The IS and LM curves should not be included, for several important reason. The IS curve may be fundamentally flawed because the negative relationship between interest rates and investment may only hold good for homebuilding and consumer durable, rather than business investment. Also, the LM curve fails to make a strong distinction between real and nominal, short and long runs. This was also a serious critique of Keynesianism, and so we can see that the old paradigm has not yet given way to the New Classical and New Keynesian synthesis.

Also, by thinking in terms of demand and supply, we tend to assume that aggregate demand and supply are adjusted rapidly to price changes, while wages remain sticky. But in reality, both prices and wages remain sticky—the supply curve should adjust, not just quantity supplied. In doing so, we would then be assuming that wages and prices should be considered to be largely predetermined in the short run, even though in the long run they will be allowed to adjust. These may be agreed to be core principles of economics, however they are not taught to principles students, nor is there any consensus on the reason for wages being so sticky

Given this brief critique, there are four core things to include in the model for understanding economics. 1) Prices and wages are largely predetermined in the short run because of price stickiness. 2) Output is demand determined in the short run—because of this, 3) Monetary and fiscal policy is effective, via demand changes from fiscal, effect interest sensitivity, effected by monetary policy. 4) Okuns law is legitimate—growth and unemployment rate.

And to summarize the problems with the old model, Blinder offers the following points: 1) The term structure of interest rates say that the rate of interest for long term maturities will be equal to the sum of the expected interest rates per year leading up to the long term rate. Although this may be intuitively appealing, it fails all the empirical tests. We must find something better because this is a major cannon of monetary policy, and we need to know more about its limitations. 2.) Modeling expectations: usually relegated to the Phillips curve on the right side of the equation showing expected inflation, but it should be expanded. A major difficulty is when we see that fiscal stimulus can actually encourage a recession. To get to this understanding, we need to see that fiscal policy works more through intertemporal shifting of demand, and that the term structure of interest rates is essentially wrong.