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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 de Lyon - École normale supérieure de 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.

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  • 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.science/hal-01830363
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    Cited by:

    1. Samuel Demeulemeester, 2024. "The case for 100% money: Ten reasons for separating money issuance from banking," Economic Affairs, Wiley Blackwell, vol. 44(1), pages 57-70, February.
    2. Demeulemeester, Samuel, 2024. "Investigating the “Debt-Money-Prices” Triangle: Irving Fisher’s Theoretical Journey Toward the 100% Money Proposal," SocArXiv tfm6v, Center for Open Science.
    3. 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: 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 Group Publishing Limited.
    4. 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.
    5. Samuel Demeulemeester, 2021. "The 100% money proposal of the 1930s: an avatar of the Currency School’s reform ideas?," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 28(4), pages 577-598, July.
    6. Samuel Demeulemeester, 2022. "What analytical framework for Sovereign Money? Some insight from the 100% Money literature, and a comment on criticisms," Working Papers hal-03751756, HAL.
    7. Samuel Demeulemeester, 2022. "Divorcing money creation from bank loans: revisiting the “100% money” proposal of the 1930s [Dissocier la création monétaire des prêts bancaires : retour sur la proposition "100% monnaie"," Post-Print hal-03938669, HAL.
    8. 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

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