IDEAS home Printed from
   My bibliography  Save this article

Mises and the moderns on the inessentiality of money in equilibrium


  • William Luther


The challenge of rendering monetary exchange intelligible within a Walrasian general equilibrium framework is well known. Perhaps less well known is the difficulty of integrating monetary and exchange economies in decentralized conceptions of equilibrium, of which the evenly rotating economy of Ludwig von Mises (1949) is an early example. After reviewing the prospect for money in the evenly rotating economy, I survey the modern literature on frictions that make money useful for exchange. While exploring techniques commonly used to generate a useful role for money in this environment, I make a distinction between exchange frictions and epistemic frictions. Although theoretical efforts have largely focused on exchange frictions, recent experimental evidence suggests that epistemic frictions warrant further attention. I conclude that Mises should be seen as a pioneer in this literature, though recent advances demonstrate that the set of frictions capable of rendering money useful is much larger than he envisioned. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • William Luther, 2016. "Mises and the moderns on the inessentiality of money in equilibrium," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 29(1), pages 1-13, March.
  • Handle: RePEc:kap:revaec:v:29:y:2016:i:1:p:1-13
    DOI: 10.1007/s11138-015-0321-0

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    File URL:
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Hogan Thomas L. & Luther William J., 2019. "Endogenous Matching and Money with Random Consumption Preferences," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(2), pages 1-9, June.
    2. William Luther, 2014. "Evenly rotating economy: A new modeling technique for an old equilibrium construct," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(4), pages 403-417, December.
    3. Davidson, Sinclair, 2023. "Blockchain and the information – calculation problem," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 142-150.
    4. Hendrickson, Joshua R. & Luther, William J., 2022. "Cash, crime, and cryptocurrencies," The Quarterly Review of Economics and Finance, Elsevier, vol. 85(C), pages 200-207.
    5. Hazlett, Peter K. & Luther, William J., 2020. "Is bitcoin money? And what that means," The Quarterly Review of Economics and Finance, Elsevier, vol. 77(C), pages 144-149.
    6. William J. Luther, 2018. "Is Bitcoin Intrinsically Worthless?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 33(Spring 20), pages 31-45.

    More about this item


    Austrian economics; Epistemic frictions; Evenly rotating economy; Exchange frictions; Gift exchange; Infinite games; Matching; Mises; Monetary economics; Money; Search; Social norms; B53; E00; E03; E40; E41; E42;
    All these keywords.

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revaec:v:29:y:2016:i:1:p:1-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.