Forget the Liquidity Trap—Loose Monetary Policies Cause Recessions

Tags: Business Cycles, Monetary Theory, Keynes

03/01/2023 Frank Shostak

At the heart of Keynesian business cycle theory is the so-called liquidity trap. Contra Keynes, however, economies don’t falter because a sudden increase in the demand for money.

Original Article: “Forget the Liquidity Trap—Loose Monetary Policies Cause Recessions”

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