Neuronal Cause Of 'Money Illusion': Inflation Felt To Be Not So Bad As A Wage Cut

Thursday, March 26, 2009 - 21:35 in Mathematics & Economics

Many people view a rise in their income as a good thing, even when the increase is completely negated again by inflation. Researchers have discovered the cerebro-physiological cause underlying this so-called "money illusion." This effect is of great practical relevance in that it explains, for instance, why financial policy and inflation can have a beneficial effect on employment and economic growth.

Read the whole article on Science Daily

More from Science Daily

Latest Science Newsletter

Get the latest and most popular science news articles of the week in your Inbox! It's free!

Check out our next project, Biology.Net