web.mit.edu - 11/14/2008
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THINKING ABOUT THE LIQUIDITY TRAP Paul Krugman December 1999 We live in the Age of the Central Banker - an era in which Greenspan, Duisenberg, and Hayami are household words, in which monetary policy is generally believed to be so effective that it cannot safely be left in the hands of ...
krugman.blogs.nytimes.com - 11/15/2008
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krugman.blogs.nytimes.com —
That's the title of a new report from
Jan Hatzius et al at Goldman Sachs (not available...
online). The Goldman guys, like me, come up with scary figures about the size of the gap in demand that needs to be filled - figures that suggest the need for a ...
(more)
Macro policy in a liquidity trap (wonkish)
marginalrevolution.com - 11/21/2008
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marginalrevolution.com —
If you don't like public spending you could
do it this way: Give every voter a federal...
debit card. And put the money in their accounts. Tell them if they don't spend it this month, the government will take it back. Some people will try to cheat ...
(more)
Fighting the liquidity trap
marginalrevolution.com - 11/17/2008
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marginalrevolution.com —
Paul Krugman thinks not : No matter how
much Japan increases the monetary base now, expectations of...
future money supplies won’t move if people believe that the Bank of Japan will move to stabilize the price level as soon as the economy recovers. ...
(more)
Can one be a liquidity trap denialist?
Comments
Blog Reactions
America's Looming Liquidity Trap
Aplia Econ Blog: News for Economics Students —
... . His 1999 article "Thinking About the Liquidity Trap" offered policy solutions for springing the Japanese economy from the type of liquidity trap that now threatens the United States. Krugman's figure 1 from that paper shows a nice IS-LM example of the ineffectiveness of monetary policy. ...
Macro policy in a liquidity trap (wonkish)
Paul Krugman —
... to go like this: creating inflation is easy — birds do it, bees do it, Zimbabwe does it. So it can’t really be a problem for competent countries like Japan or the United States. This misses a key point that I and others tried to make for Japan in the 90s and are trying to make again now: creating inflation is easy if you’re an irresponsible country . It may not be easy at all if you aren’t. A decade ago, when I tried to make sense of Japan’s predicament, I used a simple, unrealistic model to ask what we really know about the relationship between the money supply and the ...
Is Fiscal policy the Answer?
Economist's View —
Does Christina Romer believe fiscal policy won't work to cure a recession?
(No, she doesn't):
Dueling outlooks, Free Exchange: ...At the heart of depression economics,
[Paul] Krugman
has
said, "is the collapse of policy certainties". Or as he put in in a
paper on the Japanese
liquidity crunch:
The whole subject of the liquidity trap has a sort of
Alice-through-the-looking-glass quality. Virtues like saving, or a central bank
known to be strongly committed to price stability, become vices; to get out of ...
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The Russian Gas Trap
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