A bit of wonkishness based on, of all things, an article in Rolling Stone about music streaming 1/ rollingstone.com/music/music-ne…
Economists of my generation came of intellectual age amidst a bitter civil war in macroeconomics, dominated by the question of how prices respond to changes in overall demand. More or less Keynesian economists argued that prices are sticky, responding only sluggishly 2/
This implied, among other things, that increasing the money supply could have real effects, boosting the economy in a slump rather than just causing inflation. And it was a view supported by a lot of evidence 3/
But a large part of the profession insisted that because rational individuals wouldn't have any money illusion, it must not exist, so monetary policy must be useless (and let's not even get into fiscal policy). And this view gained a stranglehold over many journals 4/
I think its influence has waned recently, although it's hard to be sure, since nobody in that camp ever admits being wrong about anything. But anyway, it's fascinating to see that the price of streamed music has stayed flat for many years 5/ 
Tell me again how there's no money illusion? 6/
