stickiness is about price and wage adjustment inefficiency ...obviously
as in
"price stickiness causes relative prices to go awry,
which in turn causes resources to be misdirected"
MT
soooo
the way to avoid that is what ?
minimize necessary adjustments
that suggests steadiness which after a certain amount of ranging around
over optimal steady rates
usually settles on a real low rate because
that also reduces necessary absolute adjstments
and as average steady state price level change rises
and necessary absolute price adjustments rise with it
well the damn system might not scale well
might increase its dispersion of actual market prices from optimal market prices
so you settle down to
the creditors dream result a steadsy state rate
just enough above zero to avoid the mythic deflation suck***
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****the deflation suck is postulated to dwell down there
where japans price system wobbled along
FOR TWENTY YEARS!
but that's off topic
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what's on topic is simple
never drive the price change requirement thru serious ups and downs
it causes the system to miss some higher output thru better allocation
this follows
simply because adjustments miss optimal dead lines
the ones necessary for optimal output
and with a system of ever erratic and perhaps ever faster coming
and bigger adjustments .....
but avoiding these inefficiencies comrades
translates into perma-slack
we need to mobilize not rationalize
that is task one
keep the production system at full utilization
even if this means price change rates fly around like a bumble bee
thesis
in a market economy
based in part on relative price signals
we lose more from idling capacity then from misallocating it
from slack then from the inevitable miss pricing
that results from lots and rrapid jar-ings
of the system
by the emergence of ever new optimal targets
for relative and absolute prices
