Does Money Illusion Matter?: Reply

Jean-Robert Karl Tyran

doi:10.1257/aer.104.3.1063

Does Money Illusion Matter?: Reply

9 Citationer (Scopus)

Abstract

The data in Fehr and Tyran (2001) and Petersen and Winn (2014) show that money illusion plays an important role in nominal price adjustment after a fully anticipated negative monetary shock. Money illusion affects subjects' expectations, and causes pronounced nominal inertia after a negative shock but much less inertia after a positive shock. Thus Petersen and Winn (2014) provide a misleading interpretation of both our and their own data. (JEL C92, D83, D84, E31, E32, E52).

Originalsprog	Engelsk
Tidsskrift	American Economic Review
Vol/bind	104
Udgave nummer	3
Sider (fra-til)	1063-1071
Antal sider	9
ISSN	0002-8282
DOI	https://doi.org/10.1257/aer.104.3.1063
Status	Udgivet - mar. 2014

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10.1257/aer.104.3.1063

Citationsformater

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title = "Does Money Illusion Matter?: Reply",

abstract = "The data in Fehr and Tyran (2001) and Petersen and Winn (2014) show that money illusion plays an important role in nominal price adjustment after a fully anticipated negative monetary shock. Money illusion affects subjects' expectations, and causes pronounced nominal inertia after a negative shock but much less inertia after a positive shock. Thus Petersen and Winn (2014) provide a misleading interpretation of both our and their own data. (JEL C92, D83, D84, E31, E32, E52).",

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N2 - The data in Fehr and Tyran (2001) and Petersen and Winn (2014) show that money illusion plays an important role in nominal price adjustment after a fully anticipated negative monetary shock. Money illusion affects subjects' expectations, and causes pronounced nominal inertia after a negative shock but much less inertia after a positive shock. Thus Petersen and Winn (2014) provide a misleading interpretation of both our and their own data. (JEL C92, D83, D84, E31, E32, E52).

AB - The data in Fehr and Tyran (2001) and Petersen and Winn (2014) show that money illusion plays an important role in nominal price adjustment after a fully anticipated negative monetary shock. Money illusion affects subjects' expectations, and causes pronounced nominal inertia after a negative shock but much less inertia after a positive shock. Thus Petersen and Winn (2014) provide a misleading interpretation of both our and their own data. (JEL C92, D83, D84, E31, E32, E52).

U2 - 10.1257/aer.104.3.1063

DO - 10.1257/aer.104.3.1063

M3 - Journal article

SN - 0002-8282

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JO - American Economic Review

JF - American Economic Review

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Does Money Illusion Matter?: Reply

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