A comprehensive exploration of New Keynesian Economics, an evolution of Keynesian economic theory that explains macroeconomic phenomena such as involuntary unemployment and business cycle fluctuations through microeconomic concepts.
Sticky Prices and Sticky Wages refer to the slow adjustment of prices and wages, respectively, in response to changes in the economy. These concepts are crucial in macroeconomics, influencing inflation, unemployment, and economic policy.
Wage Rigidity encompasses the resistance of wages to adjust downwardly or upwardly in response to changes in the labor market, including both nominal and real wage stickiness.
Wage rigidity refers to the phenomenon where wage rates do not adjust to clear the labor market promptly, often due to factors like long-term contracts and collective bargaining. This article delves into its causes, effects, historical context, and significance in economics.
