Krugman on the Liquidity Trap: Why Inflation Won't Bring Recovery in Japan
Paul Krugman has argued that Japan is in a liquidity trap and that it can recover only if the central bank there follows a policy of "credible inflation." This paper argues that Krugman's proposal, which is similar to what Fisher proposed during the Depression, is based on a different interpretation of the liquidity trap from that proposed by Keynes and as a result his policy recommendations can result in neither the elimination of the trap nor in Japan's economic recovery.
|Date of creation:||23 Oct 2000|
|Date of revision:|
|Note:||Type of Document - Adobe Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 19; figures: included|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
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