Money illusion may not be irrational – BIS paper
Borio and Zabai suggest reasons for people's focus on nominal effects
People tend to think in nominal terms and not real – the "money illusion"-– but this may not be down to a failure to think about economics correctly, according to a working paper published by the Bank for International Settlements (BIS) on July 15.
Unconventional monetary policies: a re-appraisal, by Claudio Borio and Anna Zabai, is broadly sceptical of unconventional policies, noting the distortionary effects and diminishing returns that some research, much of it by BIS economists, has
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