. Inflation may be positive throughout, so the absence of deflation is not evidence against a liquidity trap. Output, on the other …I study monetary and fiscal policy in liquidity trap scenarios, where the zero bound on the nominal interest rate is … the paper. I find that the optimal interest rate is set to zero past the liquidity trap and jumps discretely up upon exit …

when countries cooperate in the face of a "global liquidity trap" - i.e., a situation where the two countries are … simultaneously caught in liquidity traps. Compared to the closed economy case, a notable feature of the optimal policy in the face of … a global liquidity trap is its international dependence. Whether or not a country's nominal interest rate is hitting the …

under a purely forward-looking inflation target. Here we consider in addition optimal tax policy in response to such a … departing from a strict inflation target are modest in the case that fiscal policy responds to the real disturbance in an …

escape from the liquidity trap …

, under certain circumstances, the credit channel transmission mechanism fails in that liquidity injections by the central … show how they can arise due to the interplay between financing frictions, liquidity, and collateral values. Our analysis …

issuance. Therefore, the monetary policy in a later period suffers from an inflation bias from the ax ante point of view …

monitor markets continuously. We study how limit order markets absorb transient liquidity shocks, which occur when a …

interest rates' to fall below zero in all countries, giving rise to a global 'liquidity trap'. This paper explores the policy … demand towards the source (home) country. The key feature of demand shocks in a liquidity trap is that relative prices … liquidity trap, there is a critical mutual interaction between monetary and fiscal policy …

Prevalent thinking about liquidity traps suggests that the perfect substitutability of money and bonds at a zero short … benefits and facilitate the use of powerful fiscal policy tools even in a liquidity trap. In this paper, we consider an … alternative approach that has been suggested for use in a liquidity trap, a scheduled increase in consumption tax rates. We find …

This paper analyzes a potential strategy for escaping liquidity traps. The strategy is based on an augmented Taylor …-type interest-rate feedback rule and differs from usual specifications in that when inflation falls below a threshold, the central … principle in a neighborhood of the intended inflation target. Importantly, the effectiveness of the potential exit strategy …