# Basic New Keynesian model with flexible price

I would like to know what would be the response of variables in the Basic New Keynesian model but with flexible prices (ie not with Calvo pricing). For example I have troubles to see how having flexible prices will matter for a productivity shockk or for a decrease in interest rate of the central bank.

As DoubleBass says basic New-Keysian model with fully flexible prices is RBC model, I'd just add that if you have already the set-up of Calvo and want to convert it to fully flexible prices you need to set the share of firms that cannot change prices to zero (i.e. if $$\lambda$$ is the share of firms that cannot change their prices in $$t$$ then set it to zero). And compute from there you responses.