Menu cost theory explains price stickiness by adjusting the actual cost or risk cost of price. The early menu cost theory explained price stickiness and economic cycle from the actual cost of lattice adjustment. Every time manufacturers adjust prices, they have to spend costs, such as researching and determining new prices, compiling price lists and replacing price labels. These costs are similar to those required for restaurants to print new menus. So the early neo-Keynesianism called this cost menu cost. As soon as the theory that small menu cost leads to big economy was put forward, it was ridiculed by neoclassical macroeconomists. The cost of menu is very small, and it is even smaller after using computer programs. The marginal cost of printing a price list every day is only a few cents, which is really insignificant in terms of profit.

Therefore, the early menu cost theory is quite naive. Another special menu cost theory emphasizes the risk cost of price adjustment in the name of menu cost, and holds that it is difficult for manufacturers to predict the consequences of product price or factor price adjustment when making price adjustment decisions. There is great uncertainty in the response of factor suppliers, customers or manufacturers to price adjustment or wage adjustment. At the same time, it is difficult to determine the influence of price level changes on the value of various tangible and intangible assets owned by manufacturers.

In the 1940s, Keynesianism began to prevail. One reason is that the media has denigrated the free market. When investigating the causes of the Great Depression, they blamed the free market itself for a series of major policy mistakes made by the Federal Reserve system and other bureaucracies. Another reason is that the political and intellectual circles at that time compared the defects of reality with the perfection of Keynesian theory, and thought that since "the market is imperfect", it means "the government is more perfect".

The problem of menu cost theory is that economists are satisfied with sitting in a warm and comfortable office and dealing with numbers and equations in computers, instead of going deep into the real economic society and exploring those economic forces that are difficult to express with numbers, so as to correctly analyze the truth of economic operation.

Arthur smith, who put forward the theory of "demand pull" with Keynes, once said half jokingly: "I started to want to be an applied economist, but I found it too difficult because I had to deal with businessmen and statistics; So I try to study economic history, but I go to the library every day. Later, I simply became a theoretical economist, because I only need a piece of paper and a pen, and I don't even have to go out. "

Keynesian scholars attach importance to "menu cost" because menu cost is the easiest data to obtain. But in the real world, businessmen respond to economic fluctuations, not just adjusting prices. Take newspapers and magazines for example, their real prices are not constant, but become very fierce; It's just that the contents of newspapers and magazines are different every day, and the quality difference is difficult to be detected, which gives the publishing house a lot of room to adjust the cost by means other than price.

The retail price of Time magazine in the United States has remained unchanged for many years, but the number of Pulitzer Prize-winning journalists employed by the magazine, the number of journalists sent around the world, the advertising price per page, the sales volume of each magazine and the average cost determined by it, as well as the large discount for long-term subscribers are all factors that the newspaper can quietly adjust.

Generally speaking, the easier it is to distinguish the quality of a product at a glance, such as any futures commodity, the more significant its price adjustment; The more difficult it is to tell the quality of products at a glance, such as publications, medical services, high-end restaurants and so on. The price fluctuation is not obvious, and merchants are more inclined to make adjustments in quality. It's not that businessmen don't respond, it's just that outsiders are not easy to detect.

For more than half a century, Keynesian scholars have put forward countless economic regulation policies from the concept of "menu cost". By their own admission, these policies have only short-term effects, not long-term solutions. But when other economic schools called for facing up to the long-term side effects of short-term intervention policies, Keynes's famous answer was: "In the long run, we are all doomed to die."

Keynes said that life is too short to get drunk. Yes, but today is yesterday's tomorrow Today's troubles may be caused by yesterday; Today's mistakes may have to be borne tomorrow. Nowadays, the United States is facing a bankrupt social security system, and the astronomical fiscal deficit is precisely caused by the previous generation to bypass the "menu cost". Recognizing this, we should not copy foreign Keynes.