5 ms·
this is an example of "price stickiness." People selling goods tend to let the price stay at whatever level it's currently at longer than is strictly rational.
by vanveenada 5y ago
this is an example of "price stickiness." People selling goods tend to let the price stay at whatever level it's currently at longer than is strictly rational. Because prices tend to be sticky, wage-driven inflation tends to result in real gains for wage-earners.
- ethanbond 5y ago(Temporarily)
- vanveenada 5y agoCorrect, because nothing lasts forever in this fallen world. That said: the amount of time spent in a state of wage-driven inflation -- setting up the situation where temporary moments of price stickiness result in increases of effective demand that in turn hot up the economy as a whole -- is the thing we want to maximize.
- ethanbond 5y agoTotally! We can also go ahead and tax away all the gains captured by landlords on the unimproved value of their land (definitionally price movement that is not due to them).
- vanveenada 5y agofound the Georgist!