Why read The Money Illusion?

Book cover of The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy

Book description

The first book-length work on market monetarism, written by its leading scholar.

Is it possible that the consensus around what caused the 2008 Great Recession is almost entirely wrong? It's happened before. Just as Milton Friedman and Anna Schwartz led the economics community in the 1960s to reevaluate its view…

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Why read it?

1 author picked The Money Illusion as one of their favorite books. Why do they recommend it?

Helena Chytilová

Author

I like this book especially due to its ability to illustrate money illusion in a very unconventional context.

Normally, money illusion means that people take nominal variables as proxy for real variables, which leads to suboptimal choice having real effects on the economy and affecting business cycle.

However, to my great surprise this book claims that even economic experts might suffer from some kind of money illusion, because they tend to misinterpret what is happening in the monetary system. This offers a very interesting explanation of recession and suggests that economists have not targeted adequate variables.

Unconventional suggestion to practice…

From Helena's list on The best economic books about money illusion, related behavioral macroeconomic topics and experiments.