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‘The Chicago Plan revisited’: a friendly critique

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  • Brett Fiebiger

    (University of Ottawa, Canada)

Abstract

This paper offers a constructive critique of ‘The Chicago Plan revisited’ published by Jaromir Benes and Michael Kumhof (2012) as an IMF working paper. On the one hand, there are reasons to query the exact details of the proposed reform, including claims of large steady-state output gains. On the other hand, the authors deserve kudos for bringing into the foreground issues which are typically ignored or inferred otherwise by neoliberal academics and those who oversee the monetary system, including the empirical validity of the endogenous money approach and the insight that ‘money’ is a societal construct. The paper concludes that there is merit in revisiting ‘100% Reserves’ as part of the theoretical rationale to expand policymaking space in debt-constrained economies.

Suggested Citation

  • Brett Fiebiger, 2014. "‘The Chicago Plan revisited’: a friendly critique," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 11(3), pages 227-249, December.
    • Handle: RePEc:elg:ejeepi:v:11:y:2014:i:3:p227-249
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    References listed on IDEAS

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    1. Jan Kregel, 2012. "Minsky and the Narrow Banking Proposal: No Solution for Financial Reform," Economics Public Policy Brief Archive ppb_125, Levy Economics Institute.
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    2. Tarne, Ruben, 2018. "Proposals for monetary reform: A critical assessment using the general quantity equation by Wolfgang Stützel," IPE Working Papers 102/2018, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

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    More about this item

    Keywords

    endogenous money; credit; banking reform; financial stability;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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