Share this entry

Share this page

money illusion

Line breaks: money il¦lu|sion

Definition of money illusion in English:

noun

[mass noun] Economics
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.
Example sentences
  • Ignoring the effects of this productivity growth is akin to money illusion in periods of inflation.
  • 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.

Share this entry

Share this page

 

What do you find interesting about this word or phrase?

Comments that don't adhere to our Community Guidelines may be moderated or removed.

Get more from Oxford Dictionaries

Subscribe to remove adverts and access premium resources

Word of the day emulous
Pronunciation: ˈɛmjʊləs
adjective
seeking to emulate someone or something