The concept of "liquidity trap" has recently seen a revival in macroeconomics. Its definition, however, is not univocal. It may be useful, therefore, to turn back to the original meaning of this expression in the works of the economists that first introduced it into economic analysis, John M....

This paper estimates a nonlinear Threshold-VAR to investigate if a Keynesian liquidity trap due to a speculative motive was in place in the U.S. Great Depression and the recent Great Recession. We find clear evidence in favor of a breakdown of the liquidity effect after an unexpected increase in...