Chicago Plan – why it never went anywhere
The principle sounded okay, but do we really want to see banks stopping money creation?
After the Great Depression a bunch of economists got together to hatch a plan to stop future runs on banks. The plan called for banks to only accept demand deposits “subject to a 100% reserve requirement in in lawful money and/or deposits with the Reserve Banks”. Some read that as an end to fractional reserve banking but, as Steve Keen explains this wee…
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