Does Money Illusion Matter?-Reference-Cited by-同舟云学术

Does Money Illusion Matter?

Published:2001-12-01 Issue:5 Volume:91 Page:1239-1262
ISSN:0002-8282
Container-title:American Economic Review
language:en
Short-container-title:American Economic Review

Author:

Fehr Ernst¹,Tyran Jean-Robert²

Affiliation:

1. Institute for Empirical Research in Economics, University of Zurich, CH-8006 Zurich, Switzerland.

2. Department of Economics, University of St. Gallen, CH-9000 St. Gallen, Switzerland.

Abstract

This paper shows that a small amount of individual-level money illusion may cause considerable aggregate nominal inertia after a negative nominal shock. In addition, our results indicate that negative and positive nominal shocks have asymmetric effects because of money illusion. While nominal inertia is quite substantial and long lasting after a negative shock, it is rather small after a positive shock. (JEL C92, E32, E52)

Publisher

American Economic Association

Subject

Economics and Econometrics

Link

https://pubs.aeaweb.org/doi/pdf/10.1257/aer.91.5.1239

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