Austrian School of Economics: Revisionist History and Contemporary Theory

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5. Modern Monetary Theory: The Austrian Contribution

  • Austrian School of Economics Salerno

Tags Booms and BustsMoney and BanksAustrian Economics OverviewBusiness CyclesMoney and BankingOther Schools of Thought

06/08/2005Joseph T. Salerno

Monetary theory is where Austrians diverge the most from mainstream. Mises built a new taxonomy of money. He said money included any checking account deposits. The marginal utility of gold on the last day of barter was determined by the uses of gold. People then demanded gold as money because there was preexisting value. A paper dollar must have such a connection to money. Government cannot create money. Money is not neutral. The natural trend of prices in a market economy is falling.

Lecture 5 of 10 from  Joseph Salerno's Revisionist History and Contemporary Theory.


Contact Joseph T. Salerno

Joseph Salerno is academic vice president of the Mises Institute, professor emeritus of economics at Pace University, and editor of the Quarterly Journal of Austrian Economics.

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