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The 100% money proposal and its implications for banking: the Currie–Fisher approach versus the Chicago Plan approach

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  • Samuel Demeulemeester

    (TRIANGLE - Triangle : action, discours, pensée politique et économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - CNRS - Centre National de la Recherche Scientifique)

Abstract

The literature on the 100% money proposal often reveals some confusion when it comes to its implications for the banking sphere. We argue that this can be partly explained by a failure to have distinguished between two divergent approaches to the proposal: the "Currie–Fisher" (or "transaction") approach, on the one hand, which would preserve banking; and the "Chicago Plan" (or "liquidity") approach, on the other hand, which would abolish banking. This division among 100% money proponents stemmed, in particular, from different definitions of money, and different explanations of monetary instability. The present paper attempts to clarify this divergence of views.

Suggested Citation

  • Samuel Demeulemeester, 2018. "The 100% money proposal and its implications for banking: the Currie–Fisher approach versus the Chicago Plan approach," Post-Print hal-01830363, HAL.
  • Handle: RePEc:hal:journl:hal-01830363
    DOI: 10.1080/09672567.2018.1435706
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01830363
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    File URL: https://hal.archives-ouvertes.fr/hal-01830363/document
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    References listed on IDEAS

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    1. Laidler,David, 1999. "Fabricating the Keynesian Revolution," Cambridge Books, Cambridge University Press, number 9780521641739.
    2. Lauchlin Currie, 2004. "The 100 percent reserve plan: August 12, 1938," Journal of Economic Studies, Emerald Group Publishing, vol. 31(3/4), pages 355-365, September.
    3. Diamond, Douglas W & Dybvig, Philip H, 1986. "Banking Theory, Deposit Insurance, and Bank Regulation," The Journal of Business, University of Chicago Press, vol. 59(1), pages 55-68, January.
    4. James W. Angell, 1935. "The 100 Per Cent Reserve Plan," The Quarterly Journal of Economics, Oxford University Press, vol. 50(1), pages 1-35.
    5. James Tobin, 1987. "Financial Intermediaries," Cowles Foundation Discussion Papers 817, Cowles Foundation for Research in Economics, Yale University.
    6. Clark Warburton, 1949. "The Secular Trend in Monetary Velocity," The Quarterly Journal of Economics, Oxford University Press, vol. 63(1), pages 68-91.
    7. Reinard Schuessler & Robert W. Dimand, 1999. "Correspondence," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 223-225, Winter.
    8. Henry C. Simons, 1936. "Rules versus Authorities in Monetary Policy," Journal of Political Economy, University of Chicago Press, vol. 44, pages 1-1.
    9. Allen, William R, 1993. "Irving Fisher and the 100 Percent Reserve Proposal," Journal of Law and Economics, University of Chicago Press, vol. 36(2), pages 703-717, October.
    10. repec:mes:jeciss:v:22:y:1988:i:2:p:533-544 is not listed on IDEAS
    11. Ronnie Phillips, 1992. "The 'Chicago Plan' and New Deal Banking Reform," Economics Working Paper Archive wp_76, Levy Economics Institute.
    12. Albert G. Hart, 1935. "The "Chicago Plan" of Banking Reform: I A Proposal for Making Monetary Management Effective in the United States," Review of Economic Studies, Oxford University Press, vol. 2(2), pages 104-116.
    13. G. Russell Barber Jr., 1973. "The One Hundred Percent Reserve System," The American Economist, Sage Publications, vol. 17(1), pages 115-127, March.
    14. repec:eee:jmacro:v:54:y:2017:i:pa:p:24-41 is not listed on IDEAS
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    Keywords

    Irving Fisher; Chicago Plan; Lauchlin Currie; banking; 100% money;

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