Monetary Policy after Bubbles Burst: The Zero Lower Bound, the Liquidity Trap and the Credit Deadlock
The current widespread use of models of monetary policy that link expenditure to interest rates, while by-passing interaction of the supply and demand for money in the transmission mechanism, fails to illuminate several important policy issues, and is beginning to create a professional "memory loss" in some of these areas. This claim is illustrated with reference to recent discussions of the conduct of monetary policy in the wake of financial crises, particularly when short interest rates are close to zero, as they have recently been in Japan.
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Volume (Year): 30 (2004)
Issue (Month): 3 (September)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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UWO Department of Economics Working Papers
8804, University of Western Ontario, Department of Economics.
- Paul R. Krugman, 1998. "It's Baaack: Japan's Slump and the Return of the Liquidity Trap," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 137-206.
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- Lars E.O. Svensson, 2003. "Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others," NBER Working Papers 10195, National Bureau of Economic Research, Inc.
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