Palacio-Vera, Alfonso - In: Eastern Economic Journal 36 (2010) 2, pp. 198-216
We compare the “New Consensus” (NC) in macroeconomics as expounded in Woodford (2003) and the Post-Keynesian (PK) approach regarding the causes of a “liquidity trap” (LT). We argue that in the NC approach a LT is a phenomenon caused by unusually large transitory shocks that depress the...