illusion of money neutrality. -- liquidity preference theory ; interest rate determination ; loanable funds fallacy ; bank …This paper revisits Keynes's liquidity preference theory as it evolved from the Treatise on Money to The General Theory … interest as a replacement for flawed saving or loanable funds theories of interest emphasizing the real forces of productivity …

ineffectiveness when nominal interest approaches the zero-bound rate. This situation was termed a liquidity trap (LT) by Robertson and … solution to overcome the LT. The macroeconomic mainstream contends that the LT is essentially a money demand problem, whereas … transformation of the monetary base into money supply. To prove our thesis, we study the behavior of the USA money multiplier and the …