Keynes's animal spirits vindicated: An analysis of recent empirical and neural data on money illusion

Sacha Bourgeois-Gironde, Marianne Guille

Research output: Contribution to journalArticlepeer-review

Abstract

The tendency of people to think of money in nominal, rather than real, terms is now well documented by recent empirical data. In particular, experimental and neurobiological data provide new insights on the individual and subindividual (neurobiological processes) anchoring of money illusion. The sensitivity of the reward brain system to the nominal format of money may explain money illusion at a biological level and provide a sort of physical demonstration of Keynes animal spirits hypothesis. These findings make it more difficult to ignore the hedonic or emotional dimension of money, which lies outside the scope of homo economicus.

Original languageEnglish
Pages (from-to)331-352
Number of pages22
JournalJournal of Post Keynesian Economics
Volume34
Issue number2
DOIs
StatePublished - 1 Jan 2011
Externally publishedYes

Keywords

  • animal spirits
  • experimental economics
  • money illusion
  • neuroeconomics

ASJC Scopus subject areas

  • Economics and Econometrics

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