The Foundations of Money Illusion in a Neoclassical Micro-Monetary Model.
This article discusses the microeconomic foundations of money illusion. Within a general neoclassical micro-monetary model of individual utility maximization, where money and commodity prices enter the objectives function, it is important to provide general conditions for the existence of demand fun...
| Publicado en: | American Economic Review Vol. 64; no. 1; pp. 115 - 123 |
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| Autores principales: | , |
| Formato: | Artículo |
| Publicado: |
American Economic Association
Mar1974
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| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | This article discusses the microeconomic foundations of money illusion. Within a general neoclassical micro-monetary model of individual utility maximization, where money and commodity prices enter the objectives function, it is important to provide general conditions for the existence of demand functions which are free of money illusion. It is necessary to consider the general formulation of consumer utility maximization when real balances enter the utility function. Moreover, it is very crucial to examine the solutions to the first-order conditions and to determine whether these solutions become altered in response to the equi-proportionate change. |
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