The Theory of Money and Credit is a 1912 economics book written by Ludwig von Mises, originally published in German as Theorie des Geldes und der Umlaufsmittel. In it Mises expounds on his theory of the origins of money through his regression theorem, which is based on logical argumentation. It is one of the foundational works of the Misesian branch of the Austrian School of economic thought. Commodity money exists today. Mises looks at the origin, nature and value of money, and its effect on determining monetary policy. It does not concern all adaptations of money. He uses the so-called regression theorem, a statement backed by a step by step, logical reasoning. Mises explains why money is demanded in its own right. According to Mises, money has historically come about after there has been a demand for the money commodity in a barter economy.

Applications

Along with Carl Menger's Principles of Economics, and Eugen von Böhm-Bawerk's Capital and Interest, the book is one of the foundational works of the Austrian School.

Publication history

Criticism

According to Michael Hendricks, "the regression theorem does a good job of explaining the creation of money, however it does not necessarily apply to all forms of money."