In the event that relative prices have to adjust, forcing flexible prices to move causes no great distortion, because they adjust easily.
There are limits to monetary policy: the Fed does not have the knowledge to bring about full employment, which requires flexible relative prices for all factors of production.
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If the prices of vegetables, fruit and other crops are more flexible than other prices, food inflation may be an early warning of an overheating economy.
Another way of putting it is that a flexible exchange rate makes sticky internal prices and wages flexible to the rest of the world.
But the Internet is unlikely to make all prices more flexible, especially because it may often be more efficient for prices to change irregularly.
Even when the zloty hardened, demand from Germany kept exports booming (keen prices and flexible workers make Polish subcontractors a vital part of the Teutonic trade machine).
Their wages and prices should be flexible, so they can correct differences in competitiveness.
Second, fiscal policy in the euro area is constrained by the European Union's stability and growth pact, which limits budget deficits, while wages and prices are less flexible than in America.
Since the prices of commodities and financial assets are among the most flexible, policymakers should let them vary and should stabilise stickier prices instead.
The report gave warning, however, that to prevent large trade imbalances, reforms would be needed to make prices and wages more flexible and workers and capital more mobile.
In the physical world, megastores such as Wal-Mart thrive on high volume, deep discounts and speedy, flexible supply chains that allow them to change prices and product mix on a daily basis.
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The company can manage its profit margins by raising prices on select items and by using a more flexible inventory and supply chain model to respond to cost pressures and new opportunities as they arise.
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For Sony, this transaction will enable it to monetize its shares in S-LCD and aims to secure a flexible and steady supply of LCD panels from Samsung, based on market prices and without the responsibility and costs of operating a manufacturing facility.
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Aereo will soon be releasing a new, flexible pricing structure that would give consumers access to the technology at a variety of prices, the company says.
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