Mises' Monetary Theory

Translation of a revised and enlarged version of “Mises’ Geldtheorie”, originally published in T. Polleit (ed.), Mises für Einsteiger (Munich: Finanzbuch-Verlag, 2013), pp. 40-82.Mises developed a new theory of money and banking that he fit into the subjectivist value theory developed by Carl Menger. He also provided numerous suggestions and clarifications to specific theoretical questions. Thus he placed the general theory of subjective value on the foundation of the logic of choice; he developed a subjectivist classification system of money as well as a systematic theory of the causes and effects of monetary prices; he researched the international impact of the changing supply of and demand for money and became a pioneer in international monetary economics; he studied the principles of price formation in unorganized markets; and he criticized mechanistic approaches to the quantity theory of money and to value theory, index number theory, as well as the theories of the Currency School and the Banking School. Last but not the least, he developed a famous crisis theory, arguing that the artificial expansion of the money supply has a tendency to lead to intertemporal imbalances within the production structure. The present chapter builds on and extends the studies of Pallas (2004) and Hülsmann (2007, 2012). We will present the historical context of Mises’ monetary thought and then give an outline of his The Theory of Money and Credit.Traduction d'une version revisée et augmentée de “Mises’ Geldtheorie”, texte publié dans T. Polleit (édit.), Mises für Einsteiger (Munich: Finanzbuch-Verlag, 2013), pp. 40-82.