A liquidity trap is a situation, described in Keynesian economics, in which injections of cash into the private banking system by a central bank fail to decrease interest rates and hence make monetary policy ineffective. A liquidity trap is caused when people hoard cash because they expect an adverse event such as deflation, insufficient aggregate demand, or war.
| Attributes | Values |
|---|---|
| rdfs:comment |
|
| foaf:depiction | |
| thumbnail | |
| is rdfs:seeAlso of |