Study reveals how price adjustments can trigger inflation and skew output
The study looked at how prices of goods in India change over time. They found that when prices go up, they go up quickly and by a lot, but when prices go down, they don't fall as much. This means that even small changes in prices can lead to inflation. Also, some firms won't let their prices fall below a certain point. This can lead to uneven distribution of goods, even if demand is the same.