Money illusion: Difference between revisions
(Created page with '==Definition== '''Money illusion''' is a phenomenon whereby a person pays more attention to the ''nominal value'' of money (i.e., the number of currency units) as opposed to the...') |
(No difference)
|
Revision as of 13:26, 16 June 2009
Definition
Money illusion is a phenomenon whereby a person pays more attention to the nominal value of money (i.e., the number of currency units) as opposed to the real value of money, i.e., its purchasing power.
Money illusion is considered responsible for sticky prices and sticky wages, though other factors, such as menu costs, are also probably at work.