Yetman, "Capital Controls, Global Liquidity Traps
and the International Policy Trilemma," NBER Working Paper No.
In their efforts to fight inflation, central banks keep interest rates high, which effectively created liquidity traps
in these economies.
Both have been used more widely -- indeed, taken to extreme levels -- to supplement the unconventional expansion of balance sheets in the context of liquidity traps
Australian author Dudley Skelley presents Let's Begin Again for the New Millennium, an anthology of 21 socially conscious poems about potential solutions to human problems - especially liquidity traps
(scarcity of credit) and environmental issues.
I don't wish to leave the impression that Congdon has completely overlooked the problems raised by liquidity traps
Goodfriend (2000) and Buiter and Panigirtzoglou (2003) have revived an old proposal by Silvio Gesell for the government to tax money, effectively removing the lower bound on interest rates and therefore eliminating the possibility of liquidity traps
22) Models with multiple steady states are a natural laboratory for the study of learning issues, independent of questions about liquidity traps
While not everyone agrees that liquidity traps
are a serious possibility, in this Economic Commentary, we assume they are and discuss the merits and the drawbacks of these exchange-rate-based escapes.
In the same way that liquidity traps
can be expunged from financial city centres and the free international flight of capital - flight in as well as out - so too can economies in Asia/Pacific help themselves by building in safety factors for future recessions.
Krugman uses slow growth of M2 to infer liquidity traps
(except in the United States in 2009), but growth of Japan's M2 plus CDs accelerated modestly from 1993 to 1998 when the monetary base did.
The prevalent thinking about liquidity traps
suggests that the perfect substitutability of money and bonds at a zero short-term nominal interest rate renders open market operations ineffective for achieving macroeconomic stabilization goals.
The chapter concludes with interesting discussions of real-balance effects and liquidity traps
, Ricardian equivalence, and the role of fiscal policy in generating inflation.