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Price rigidity means the costs of goods does not adapt immediately to fluctuations in money supply (e.g. employment & rent contracts take time to be renegotiate
by DavidSJ 14y ago
Price rigidity means the costs of goods does not adapt immediately to fluctuations in money supply (e.g. employment & rent contracts take time to be renegotiated, price changes take time to ripple through the supply chain, etc.), so it's not equivalent.
- Groxx 14y agoSo, if our economy were to be immediately influenced by inflation efforts (say wages and costs automatically tracked it to the day)... then what? Though that's kind of crazy, it's far from a possibility. And, given the increasingly-global nature of business, anything like online sales could easily track this to the minute by watching exchange rates. It's definitely not there yet, but it almost seems inevitable given time.