The neutrality of money states that the change in money supply will only impact the nominal variable that is; there will be no change in the real variables. The theory is based on the idea that the money is neutral that is, printing money cannot change the economy's position or the economy's equilibrium, though it can drive the demand and increase the prices.

The natural rate hypothesis was posited by economist Milton Friedman. The theory states that there is always some amount of unemployment that exists in the free labor market. The unemployment is unavoidable in the labor market. The unemployment takes in to account mainly the frictional and structural unemployment rates.