Abstract
This study has shown that money illusion and strategic complementarity are causes of nominal rigidity and monetary non-neutrality. This finding brings up a difficult issue: if the rational-agent paradigm fails to predict behavior in this case, should we give up rational-agent theory? Section 2.1. explains why the traditional answer to this question has been negative. It is argued that a more differentiated answer could be productive. Section 2.2. specifies what providing a “differentiated“ attitude to rationality issues implies for macroeconomic theory. Section 2.3. draws some tentative conclusions for economic policy.
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