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Recent moodle developments in the theory of short-term www.ui.texasworkforce.org economic fluctuations reminded that we do not understand the economic flktuasi as good as we thought. The economists who believe that wages and prices are sticky / hard turns. Price stickiness is a form of market imperfections, and it opens the possibility that government policy can improve the economic welfare of the whole community.

In contrast, real business cycle theory states
www.ui.texasworkforce.org that government influence on the economy is limited, and even if it is able to stabilize the economy, the government should not try. According to this theory, the ups and downs of the business cycle is a reasonable response and efficient economy against possible changes in technology. Standard real business cycle models do not include any kind of imperfection pasa.

Economists differ in which pieces of evidence they find most convincing, so that the theory of economic fluctuations remain a source of heated debate. Real business cycle theory emphasizes optimasasi between time and forward-looking behavior, while the new Keynesians emphasize the importance of sticky prices and other market imperfections. Thus, theories border incorporates many elements of this research to develop our understanding of economic fluctuations.