New EU stimulus measures will begin next month with aggressive purchases of asset-backed securities and covered bonds, and will eventually increase the ECB balance sheet by approximately €1 trillion. Among their touted benefits—higher asset prices, increases in bank lending and employment, rivers of milk and honey—many expect an upswing in exports, as the depreciation of the euro will make them cheaper and more attractive to foreigners. In fact, because Eurozone monetary inflation lagged behind the Japan and the U.S. in recent years, it has—among other things—turned the exchange rate against European exporters. “Perhaps the main immediate benefit of the additional policy action is a weakening of the exchange rate,” claims the chief economist of Markit, Chris Williamson. “The lower exchange rate will undoubtedly provide a boost to exporters’ competitiveness.”
Mises dealt with the alleged stimulating effect of inflation on trade for the first time in 1907 in an essay titled “The Political-Economic Motives of the Austrian Currency Reform”. Mises explained that interest groups in Austria at the end of the 19th century pushed for currency reform so as to favor their commercial ventures. The depreciation of the Austrian florin which followed “functioned like a protective tariff against the import of foreign manufactured goods, and assisted the export of domestic products like an export premium” (Mises 2012 , 13).