Magic Fairies Cause Recessions

Here’s how recessions work. Sometimes, for whatever reason, the Federal Reserve decides to raise interest rates. That’s expected to cause deflation, so companies want to lower their prices to avoid being outcompeted when all the other companies lower their prices. But here’s the problem -- some of them can’t. Because every quarter, a magical fairy taps a certain percentage of them on the shoulder and says “Sorry, you’re not allowed to change your prices this quarter.” Since they can’t drop their price, companies that get cursed by the fairy end up just producing less. Voila -- a recession!