Inflation and Deflation: Austrian Definitions
While (re-)reading one of the chapters of Mises’s Theory of Money and Credit, I noted my underlining of the very clearly formulated definitions on page 240. Mises defines inflation as:
an increase in the quantity of money (in the broader sense of the term, so as to include fiduciary media as well), that is not offset by a corresponding increase in the need for money (again in the broader sense of the term), so that a fall in the objective exchange-value of money must occur.
Austrians commonly refer to only the first part of this definition – the increase in the quantity of money – without the specifying statement that inflation is only that part which is not offset by an increased demand for money (which, indirectly, seems to suggest a “soft dismissal” of monetarism rather than the hard line that would otherwise follow).
The same seems to be true for Mises’s definition of deflation:
a diminution of the quantity of money (in the broader sense) which is not offset by a corresponding diminution of the demand for money (in the broader sense), so that an increase in the objective exchange-value of money must occur.
Now, it would not be fair to say that these definitions as formulated by Mises back in 1912 in any sense were final. And it is far from impossible that Austrian thinkers before and since then have used idiosyncratic and different variations of these definitions, but presumably with a common core of their meaning.
But what definitions are there? I am interested in finding out what other definitions of inflation and deflation are available in Austrian works. Please post the definitions you are aware of in the comments section (direct quotes with page references, please).