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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 - UJM - Université Jean Monnet [Saint-Étienne] - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - 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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    References listed on IDEAS

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    1. Laidler,David, 1999. "Fabricating the Keynesian Revolution," Cambridge Books, Cambridge University Press, number 9780521641739, December.
    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.
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    Cited by:

    1. Samuel Demeulemeester, 2020. "Would a State Monopoly Over Money Creation Allow for a Reduction of National Debt? A Study of the “Seigniorage Argument” in Light of the “100% Money” Debates," Research in the History of Economic Thought and Methodology, in: Luca Fiorito & Scott Scheall & Carlos Eduardo Suprinyak (ed.),Research in the History of Economic Thought and Methodology: Including a Symposium on Public Finance in the History of Economic Thought, volume 38, pages 123-144, Emerald Publishing Ltd.
    2. Sylvie Rivot, 2020. "Information and Expectations in Policy-Making: Friedman's Changing Approaches to Macroeconomic Dynamics," GREDEG Working Papers 2020-39, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    3. George S. Tavlas, 2020. "On the controversy over the origins of the Chicago Plan for 100 percent reserves," Working Papers 279, Bank of Greece.

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    Keywords

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

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