Monetary Theory

When the Massachusetts colony issued its own unredeemable paper money in 1690, it was with the promise that it would soon be redeemable in specie. It was a lie.

Ludwig von Mises’s first major work was The Theory of Money and Credit in which he explained the role of money in the economy and also pointed out what causes the boom-bust cycle. It remains an important classic in Austrian economics.

Ludwig von Mises’s first major work was The Theory of Money and Credit in which he explained the role of money in the economy and also pointed out what causes the boom-bust cycle. It remains an important classic in Austrian economics.

New scholarly work is appearing regularly in the Quarterly Journal of Austrian Economics. Here are some articles from the latest issue.

Bob applies Mises’ taxonomy of money and the regression theorem to Bitcoin, asking whether it should be classified as commodity or fiat money and whether Austrian theory really rules out Bitcoin ever becoming money.

It is clear that the government has lost all spending discipline and it would be foolish to believe that it will suddenly regain that discipline absent an external control, namely, gold.

Ironically, an acatallactic pseudo-theory of money that emerged from a school of thought that rejected theory in favor of an empirico-realistic, historical theory of money now finds it intellectually acceptable, not only to reject catallactic economic theory, but also empirical history.

The purchasing power of the US dollar has been debased by over 99 percent since the foundation of the Federal Reserve.

Menger said alternative monetary theories were “unhistorical,” but one could argue that Menger’s theory also lacks historical evidence necessary to verify his theory. Did Menger display a double standard or a nuanced view as to what we should expect from different monetary theories?

A. Mitchell Innes—a chartalist pioneer—wrote a pamphlet “What Is Money?” (1913) which found a credulous and ideologically sympathetic audience in J. M. Keynes.