Does the Liquidity Trap Exist?
نویسندگان
چکیده
منابع مشابه
Liquidity Trap
The economic situation in a wide range of economies in the wake of the crisis that began in 2007 is characterised by many as a liquidity trap. The original conceptualization of the liquidity trap was part of Keynes’s (1936) theory of liquidity preference. It referred to a situation where the monetary authorities could not reduce the nominal long-term interest rate any further by selling bonds b...
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In standard solutions, the new-Keynesian model produces a deep recession with deflation in a liquidity trap. The model also makes unusual policy predictions: Useless government spending, technical regress, and capital destruction have large multipliers. These predictions become larger as prices become less sticky. I show that both data and policy predictions are strongly affected by equilibrium...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2020
ISSN: 1556-5068
DOI: 10.2139/ssrn.3578357