---
entity_slug: permanent_versus_temporary_price_effects
entity_type: Principle
vsm_system: S2
type_rationale: This represents an abstract theoretical framework that Smith applies
  across different economic contexts to analyze price phenomena, functioning as a
  general rule for understanding market behavior rather than a specific entity or
  process.
vsm_rationale: This principle operates primarily within the coordination system by
  helping to distinguish between different types of price signals and their underlying
  causes, which is essential for proper market coordination and anti-oscillation mechanisms.
classified_at: '2026-02-23T11:20:45.509871'
---

# Classification: Permanent Versus Temporary Price Effects

## Entity Type

Principle

## VSM System

S2

## Type Rationale

This represents an abstract theoretical framework that Smith applies across different economic contexts to analyze price phenomena, functioning as a general rule for understanding market behavior rather than a specific entity or process.

## VSM Rationale

This principle operates primarily within the coordination system by helping to distinguish between different types of price signals and their underlying causes, which is essential for proper market coordination and anti-oscillation mechanisms.
