Rethinking ‘Sticky Prices” and Monetary Disequilibrium
Dr. Jonathan Newman joins the Human Action Podcast to discuss his recent QJAE article disputing the claim that ‘sticky prices’ prevent markets from clearing--i.e., when the quantity supplied equals the quantity demanded. Dr. Newman applies Mises’s “plain state of rest” to show that each voluntary exchange equates quantities supplied and demanded, so observed “stickiness” doesn’t imply non-clearing markets.
- “There Ain’t No Such Thing as a Sticky Price”: Mises.org/HAP525a
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