Price desynchronization leads to substantial price level inertia and economic implications.
Price decisions made at different times can lead to slow adjustments in prices, causing inertia in the overall price level. Even small delays in price adjustments can result in significant price level inertia. Desynchronized price decisions can impact both relative prices and overall economic activity. Early-stage goods in production chains tend to have more price variability. Price inertia caused by desynchronization may be challenging to eliminate, as agents may not have an incentive to change their timing decisions.