Monetary theory and policy: the difficult relationship of Menger’s theory of money and his positions on currency reform and monetary policy

Abstract

The contribution attempts an evaluation of Menger’s theory of money by comparison of his Geld-article (1892/1909) with his statements in the context of the introduction of the gold standard in the Austro-Hungarian monarchy in 1892. In the first place, this concerns the goal of constancy of the value of money, but also his theory of money under uncertainty, his attitude towards the banking system, and other issues. The contribution also discusses the fundamental political dimension of pursuance of monetary policy goals and the anti-interventionist orientation of the economic liberalism of the representatives of later generations of the Austrian School.