Liquidity Trap

Definition:

A situation where monetary policy can no longer stimulate the economy. When an economy enters liquidity trap, increases in money supply fail to lower interest rates and fail to stimulate the economy.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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The failure to make timely payment of interest or principal on a debt security or to otherwise comply with the provisions of a bond indenture. A breach of a covenant. In context of project financing... Read More

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