The SciAm authors get Milton Friedman completely wrong. He, like other monetarists, emphatically believed in short-run money illusion, contrary to what the SciAm authors say.

Indeed, Friedman's famous AEA Presidential Address was largely about short-run money illusion, its disappearance in the long run, and the implications for economic theory and policy. But the SciAm authors have reduced Friedman to a foil, so there's no room for accurately summing up monetarism.

As John Gurley summed up monetarism in the 1960's: "Money is a veil, but when the veil flutters, real output sputters." Sounds like money illusion to me.

And the evidence emphatically supports the idea that that there is roughly zero long-run money illusion. The link in my name heads to a classic paper, "Some Monetary Facts," that shows that money growth and inflation have roughly zero correlation with long-run output growth. So money illusion is (at best) a short-run phenomenon, as Friedman argued.

Robert Lucas's Nobel Lecture and basically any macroeconomics text--New Keynesian or neoclassical--will tell much the same tale.

There are exceptions and caveats, but the big story is simple: Money illusion is a short-run phenomenon, and Milton Friedman preached that fact.

Guess we can't trust SciAm for economics coverage.

SciAm has been a rag for fifteen years.