New economic models reveal impact of fixed prices on unemployment rates
The article discusses how fixed prices in the economy affect economic policy decisions and the equilibrium between supply and demand. Unlike traditional Keynesian models, where prices can adjust, fixed prices lead to a different type of equilibrium based on quantities. The study shows that even with fixed prices, an equilibrium can exist without the need for price flexibility. When firms' expectations match actual demand and supply, a fixed price equilibrium is achieved, similar to the traditional Keynesian view.