[{"data":1,"prerenderedAt":63},["ShallowReactive",2],{"term:liquidity-trap":3},{"term":4,"related":46},{"id":5,"title":6,"body":7,"category":27,"description":28,"extension":29,"faq":30,"meta":31,"navigation":32,"path":33,"related":34,"seo":39,"stem":40,"takeaways":41,"__hash__":45},"terms\u002Fterms\u002Fliquidity-trap.md","Liquidity Trap",{"type":8,"value":9,"toc":22},"minimark",[10,15,19],[11,12,14],"h2",{"id":13},"understanding-liquidity-trap","Understanding Liquidity Trap",[16,17,18],"p",{},"When short-term interest rates hit or near zero, central banks cannot cut them much further, and people are content to hold extra money instead of spending or investing it.",[16,20,21],{},"Japan from the late 1990s and many advanced economies after 2008 faced this problem. Responses include quantitative easing, forward guidance and fiscal stimulus.",{"title":23,"searchDepth":24,"depth":24,"links":25},"",2,[26],{"id":13,"depth":24,"text":14},"economy","A situation where interest rates are so low that monetary policy loses its usual power to boost spending.","md",[],{},true,"\u002Fterms\u002Fliquidity-trap",[35,36,37,38],"quantitative-easing","liquidity-preference","deflation","keynesian-economics",{"title":6,"description":28},"terms\u002Fliquidity-trap",[42,43,44],"Monetary easing stops working well near zero interest rates.","Extra money is hoarded rather than spent.","Fiscal policy and unconventional tools matter more in a trap.","ugEV70F-IzkacYz8H44hdJTXDQdH40INqyArP0j1haQ",[47,51,55,59],{"title":48,"description":49,"path":50},"Deflation","A sustained fall in the general level of prices.","\u002Fterms\u002Fdeflation",{"title":52,"description":53,"path":54},"Keynesian Economics","The school of thought that total demand drives output and employment in the short run, and that policy can stabilize it.","\u002Fterms\u002Fkeynesian-economics",{"title":56,"description":57,"path":58},"Liquidity Preference","Keynes's theory that interest rates are set by the demand for and supply of money.","\u002Fterms\u002Fliquidity-preference",{"title":60,"description":61,"path":62},"Quantitative Easing (QE)","Large-scale bond purchases by a central bank to lower long-term interest rates.","\u002Fterms\u002Fquantitative-easing",1793374005375]