07278oam 22015014 450 991078648100332120230801225326.01-4755-8778-31-4755-3005-6(CKB)2670000000278846(EBL)1606934(SSID)ssj0000943834(PQKBManifestationID)11503123(PQKBTitleCode)TC0000943834(PQKBWorkID)10978435(PQKB)11265843(MiAaPQ)EBC1606934(Au-PeEL)EBL1606934(CaPaEBR)ebr10627067(OCoLC)805951598(IMF)WPIEE2012202(IMF)WPIEA2012202(EXLCZ)99267000000027884620020129d2012 uf 0engur|n|---|||||txtccrThe Chicago Plan Revisited /Michael Kumhof, Jaromir BenesWashington, D.C. :International Monetary Fund,2012.1 online resource (72 p.)IMF Working PapersDescription based upon print version of record.1-4755-6220-9 1-4755-0552-3 Includes bibliographical references.Cover; Contents; I. Introduction; II. The Chicago Plan in the History of Monetary Thought; A. Government versus Private Control over Money Issuance; B. The Chicago Plan; III. The Model under the Current Monetary System; A. Banks; B. Lending Technologies; C. Transactions Cost Technologies; D. Equity Ownership and Dividends; E. Unconstrained Households; F. Constrained Households; G. Unions; H. Manufacturers; I. Capital Goods Producers; J. Capital Investment Funds; K. Government; 1. Monetary Policy; 2. Prudential Policy; 3. Fiscal Policy; 4. Government Budget Constraint; L. Market ClearingIV. The Model under the Chicago PlanA. Banks; B. Households; C. Manufacturers; D. Government; 1. Monetary Policy; 2. Prudential Policy; 3. Fiscal Policy; 4. Government Budget Constraint; 5. Controlling Boom-Bust Cycles - Additional Considerations; V. Calibration; VI. Transition to the Chicago Plan; VII. Credit Booms and Busts Pre-Transition and Post-Transition; VIII. Conclusion; References; Figures; 1. Changes in Bank Balance Sheet in Transition Period (percent of GDP); 2. Changes in Government Balance Sheet in Transition Period (percent of GDP)3. Changes in Bank Balance Sheet - Details (percent of GDP)4. Transition to Chicago Plan - Bank Balance Sheets; 5. Transition to Chicago Plan - Main Macroeconomic Variables; 6. Transition to Chicago Plan - Fiscal Variables; 7. Business Cycle Properties Pre-Transition versus Post-TransitionAt the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.IMF Working Papers; Working Paper ;No. 2012/202Banking lawUnited StatesBanks and bankingUnited StatesBanks and BankingimfMoney and Monetary PolicyimfIndustries: Financial ServicesimfPublic FinanceimfAccountingimfFinancial Markets and the MacroeconomyimfMonetary PolicyimfBanksimfDepository InstitutionsimfMicro Finance InstitutionsimfMortgagesimfMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralimfFinancial Institutions and Services: Government Policy and RegulationimfDebtimfDebt ManagementimfSovereign DebtimfPublic AdministrationimfPublic Sector Accounting and AuditsimfBankingimfMonetary economicsimfFinanceimfFinancial services law & regulationimfPublic finance & taxationimfFinancial reporting, financial statementsimfLoansimfCreditimfBank creditimfCapital adequacy requirementsimfMoneyimfFinancial institutionsimfPublic debtimfFinancial statementsimfPublic financial management (PFM)imfBanks and bankingimfAsset requirementsimfDebts, PublicimfFinance, PublicimfUnited StatesimfBanking lawBanks and bankingBanks and BankingMoney and Monetary PolicyIndustries: Financial ServicesPublic FinanceAccountingFinancial Markets and the MacroeconomyMonetary PolicyBanksDepository InstitutionsMicro Finance InstitutionsMortgagesMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralFinancial Institutions and Services: Government Policy and RegulationDebtDebt ManagementSovereign DebtPublic AdministrationPublic Sector Accounting and AuditsBankingMonetary economicsFinanceFinancial services law & regulationPublic finance & taxationFinancial reporting, financial statementsLoansCreditBank creditCapital adequacy requirementsMoneyFinancial institutionsPublic debtFinancial statementsPublic financial management (PFM)Banks and bankingAsset requirementsDebts, PublicFinance, PublicKumhof Michael1472664Benes Jaromir866239DcWaIMFBOOK9910786481003321The Chicago Plan Revisited3858197UNINA