Japan has experienced stagnation, deflation, and low interest rates for decades. It is caught in a liquidity trap. This … paper examines Japan’s liquidity trap in light of the structure and performance of the country’s economy since the onset of … understanding Japan’s liquidity trap but also for formulating and implementing policies that can overcome the liquidity trap and …

Japan has been in a benign liquidity trap since 1990. In a benign liquidity trap, interest rates approach zero, prices … macro theories. This paper introduces a monetary general equilibrium model that is compatible with Japan’s performance and …