Sato, Kazuo - In: Journal of Asian Economics 19 (2008) 2, pp. 155-169
Keynes' "liquidity trap" rarely occurs. But when it does, it has a tremendously adverse effect on the economy concerned. Such was the case of the United States in the 1930s and now that of contemporary Japan. In a liquidity trap, monetary policy pushes the money interest rate to the zero level...