ABSTRACT
In economic theory, one key assumption in mathematical models is the assumption that there is no money illusion. This gives the opportunity to separate the economic spheres of real goods and services from those of the monetary valuation of such goods and services. That dichotomy, however, contributes to failures to understand the interdependencies between both spheres. Money is considered to be just another good which acts as a numéraire to standardize the valuation in a common accounting unit. Because of its analytical convenience, this assumption has become something like a principle that distinguishes good from bad economics.
