Definition of money illusion in English:

money illusion


mass nounEconomics
  • Belief that money has a fixed value in terms of its purchasing power, so that, for example, changes in prices represent real gains and losses.

    • ‘As evidence of the perverse effect of the money illusion, let me cite a survey reported by sociologist Norval Glenn.’
    • ‘The implications of wage stickiness and the possibility of a money illusion have been discussed at least since Keynes.’
    • ‘While deflation is in place, the money illusion will cause profits to be overstated, as in Japan today, which moderates the level of bankruptcies.’
    • ‘Ignoring the effects of this productivity growth is akin to money illusion in periods of inflation.’
    • ‘There existed, and had to be taken into account, something of a money illusion.’