This paper examines demand spillovers in a two country open economy model to a demand shock newline (emanating from a … single, source country) sufficiently large to push one or both countries into a liquidity trap. The zero lower bound on … study conditions under which a liquidity trap in one country might spillover to a trading partner. We study, under which …

cornerstone of modern macroeconomic theory. …

countries' responses to monetary policy steps to the theoretical assumptions of the liquidity trap phenomenon. Our assumption is …