It sure seems like it. The latest paper to cause a big splash is their “Chicago Plan” proposal, where they analyze what might happen to the economy if the government decided to go to a 100% reserve system and issue money directly from the treasury.
Here’s highlights from the first few pages.
First up is some interesting ideas about how the government treats coins:
“In this context it is critical to realize that the stock of reserves, or money, newly issued by the government is not a debt of the government. The reason is that ﬁat money is not redeemable, in that holders of money cannot claim repayment in something other than money.1 Money is therefore properly treated as government equity rather than government debt, which is exactly how treasury coin is currently treated under U.S. accounting conventions (Federal Accounting Standards Advisory Board (2012)).”
Huh. Sounds like someone has been following the saga of the Trillion Dollar Coin. Carlos put this idea on the international map.
There is an interesting observation on money-like instruments:
“Second, the banking system’s credit assets must be funded by non-monetary liabilities that are not subject to runs. This means that policy needs to ensure that such liabilities cannot become near-monies.”
Huh. Did they read anything about Money-like Instruments?
Then, the observation we’ve somehow given banks complete control over our money supply:
“In a ﬁnancial system with little or no reserve backing for deposits, and with government-issued cash having a very small role relative to bank deposits, the creation of a nation’s broad monetary aggregates depends almost entirely on banks’ willingness to supply deposits. Because additional bank deposits can only be created through additional bank loans, sudden changes in the willingness of banks to extend credit must therefore not only lead to credit booms or busts, but also to an instant excess or shortage of money, and therefore of nominal aggregate demand.”
Huh. Seems close to plagiarism of Cullen Roche if you ask me.
“The US monetary system is designed to cater for the creation of the public’s money supply primarily by private banks. Most modern money takes the form of bank deposits and most market exchanges involving private agents are transacted in private bank money: it is “inside money“ which rules the roost so to speak in the day-to-day functioning of modern fiat monetary systems. The role of the public sector “outside money” creation is comparatively minor.
It seems like we’d have to change the nature of our institutions to be able to accomplish the Chicago Plan. Here’s JKH’s contingent institutional approach.
Now, I am not claiming we’re the only people on the internets talking about these ideas. We are one of the few sites on the web where you’ll find all of these ideas in one place.
The two authors of the IMF paper have dealt with these issues in other papers, and I don’t think they read MR and had an Eureka! moment. Still, single papers don’t change minds on complex topics like these, and they investigate these ideas through the lens of a very specific plan instead of a broadly based approach like we have here.