The Definition of Inflation According to Mises: Implications for the Debate on Free Banking

The discussion of what is and what is not inflation has become central among the Austrian economists in their debate between free banking with fractional reserves versus banking with 100-percent reserve. Many Austrians also turn to the writings of Mises to find out what the dean of Austrian Economics thought about inflation, but there is no agreement on the interpretation of his writings either. This article tries to contribute to the interpretation of Mises’ concept of inflation.