Impact of asset prices onto the US and / or European wealth
• Time frame: 2007–2017
• Relationship between asset prices and US household wealth and the effect of that relationship on
the economy
• Faber: “the median household’s or asset owner’s wealth has declined by close to 40% in real terms
(adjusted by the CPI) from its peak in 2007.”
Income inequality and interest rates
• Due to current research results the awareness emerged that the relationship between the interest
rate and income inequality is found to be negative and statistically significant.
• Berisha, Meszaros and Olson interpret this result as suggesting that high income earners derive a
larger portion of their income from interest rate sensitive assets.
Sovereign Money
• Modelling Sovereign Money for the European banking system
• Based on the Working paper of the IMF (WP/12/202) by: Jaromir Benes and Michael Kumhof: “At
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.”
• The goal is to create a calibrated model of sovereign money for the banking system of the EU.