The concept of neutral money plays a central role in contemporary macroeconomic theory as an implication of the “classical dichotomy” and is also very much a live issue in recent monetary policy discussion revolving around the notion of a “neutral interest rate.” Modern scholars...

This paper uses the Austrian theory of money, as developed mainly by Ludwig von Mises and Murray N. Rothbard to identify the separate economic processes commonly designated as “deflationary” and to determine whether they can be classified as “benign” or “malignant.”