There's a famous economics paper arguing this based on microeconomic factors, and that this is largely a reason why recessions happen. As you implied, "sticky

There's a famous economics paper arguing this based on microeconomic factors, and that this is largely a reason why recessions happen. As you implied, "sticky prices can be both privately efficient and socially inefficient." and " Private incentives produce too much price adjustment following an expansion in aggregate demand and too little price adjustment following a contraction in aggregate demand." https://scholar.harvard.edu/files/mankiw/files/small_menu_costs.pdf https://scholar.harvard.edu/files/mankiw/files/small_menu_co...