Hence the standard belief that reluctance to lower nominal prices, or delay in lowering nominal prices, is key (along with nominal debt contracts) to explaining the observed fact that deflation is destructive of RGDP, which is why Scott Sumner’s blog is called “The Money Illusion”.
Hence the standard belief that reluctance to lower nominal prices, or delay in lowering nominal prices, is key (along with nominal debt contracts) to explaining the observed fact that deflation is destructive of RGDP, which is why Scott Sumner’s blog is called “The Money Illusion”.