Price Rigidities and the Market Process

Review of Social and Economic Issues, Vol. 1, No. 2, 2015

10 Pages Posted: 25 Feb 2016

Date Written: 2015

Abstract

Paper deals with the role of price rigidities in the market process and monetary policy. The costs of price adjustment are inherent in the nature of entrepreneurial behaviour on the market. If price‐setting is based on the decision of actors on a free market, then it is based on the knowledge of dispersed information which cannot be known to any authority in its entirety. This fact takes us to logically the conclusion that a central authority cannot have a clear idea how prices correspond to preferences or the scarcity of resources.

Keywords: price rigidites, market process, monentary policy

JEL Classification: E31, E51

Suggested Citation

Rybáček, Václav, Price Rigidities and the Market Process (2015). Review of Social and Economic Issues, Vol. 1, No. 2, 2015, Available at SSRN: https://ssrn.com/abstract=2737375

Václav Rybáček (Contact Author)

Czech Statistical Office ( email )

Na padesatem 81
Praha, 10000
Czech Republic

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