cornerstone of modern macroeconomic theory. …

Safe asset shortages can expose the economy to liquidity traps. The nature of these traps is determined by the … cyclicality of the bond premium. Selfful filling liquidity traps are associated with a counter-cyclical bond premium. Small … liquidity traps arise under a pro-cyclical bond premium and government debt is expansionary. In the data, we find evidence of a …

, flight-to-safety or liquidity premiums? Using data on German nominal bonds between 2005 and 2015, we study the differential … pricing and liquidity of short and long maturity bonds. We find statistically significant, but economically negligible … segmentation in yields and some degree of liquidity segmentation of short-term versus long-term bonds. These results have important …

markets may drive economies into recessions, it shows the following: (1) Liquidity traps may occur not only when interest … flexible exchange rates when the country is stuck in a liquidity trap; (3) Near the fringe of liquidity traps, the risk arises …