07462oam 22015854 450 991096122610332120250426110753.09781475587784147558778397814755300561475530056(CKB)2670000000278846(EBL)1606934(SSID)ssj0000943834(PQKBManifestationID)11503123(PQKBTitleCode)TC0000943834(PQKBWorkID)10978435(PQKB)11265843(Au-PeEL)EBL1606934(CaPaEBR)ebr10627067(OCoLC)805951598(IMF)WPIEE2012202(IMF)WPIEA2012202(MiAaPQ)EBC1606934WPIEA2012202(EXLCZ)99267000000027884620020129d2012 uf 0engur|n|---|||||txtccrThe Chicago Plan Revisited /Michael Kumhof, Jaromir Benes1st ed.Washington, D.C. :International Monetary Fund,2012.1 online resource (72 p.)IMF Working PapersDescription based upon print version of record.9781475562200 1475562209 9781475505528 1475505523 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 StatesAccountingimfAsset requirementsimfBank creditimfBankingimfBanks and BankingimfBanks and bankingimfBanksimfCapital adequacy requirementsimfCreditimfDebt ManagementimfDebtimfDebts, PublicimfDepository InstitutionsimfFinanceimfFinance, PublicimfFinancial Institutions and Services: Government Policy and RegulationimfFinancial institutionsimfFinancial Markets and the MacroeconomyimfFinancial reporting, financial statementsimfFinancial services law & regulationimfFinancial statementsimfIndustries: Financial ServicesimfLoansimfMicro Finance InstitutionsimfMonetary economicsimfMonetary PolicyimfMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralimfMoney and Monetary PolicyimfMoneyimfMortgagesimfPublic AdministrationimfPublic debtimfPublic finance & taxationimfPublic FinanceimfPublic financial management (PFM)imfPublic Sector Accounting and AuditsimfSovereign DebtimfUnited StatesimfBanking lawBanks and bankingAccountingAsset requirementsBank creditBankingBanks and BankingBanks and bankingBanksCapital adequacy requirementsCreditDebt ManagementDebtDebts, PublicDepository InstitutionsFinanceFinance, PublicFinancial Institutions and Services: Government Policy and RegulationFinancial institutionsFinancial Markets and the MacroeconomyFinancial reporting, financial statementsFinancial services law & regulationFinancial statementsIndustries: Financial ServicesLoansMicro Finance InstitutionsMonetary economicsMonetary PolicyMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralMoney and Monetary PolicyMoneyMortgagesPublic AdministrationPublic debtPublic finance & taxationPublic FinancePublic financial management (PFM)Public Sector Accounting and AuditsSovereign Debt332.1/52Kumhof Michael1815645Benes Jaromir866239DcWaIMFBOOK9910961226103321The Chicago Plan Revisited4371709UNINA