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Liquidity trap |
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Liquidity trapA situation in which expansionary monetary policy fails to stimulate the economy. As used by Keynes (1936), this meant interest rates so low that expectations of their increase made people unwilling to hold bonds. Today it usually means a nominal interest rate so near zero that lowering it further is impossible or ineffective.Similar MatchesLiquidity ratioLiquidity ratioSee 'acid test'. Liquidity FundLiquidity FundA California company that buys real estate limited partnership interests at 25% to 35% lower than the current value of the real estate assets. Liquidity preference hypothesisLiquidity preference hypothesisThe argument that greater liquidity is valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates. Liquidity diversificationLiquidity diversificationInvesting in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor. Liquidity premiumLiquidity premiumForward rate minus expected future short-term interest rate. Further SuggestionsliquidityAccounting liquidity Liquidity crisis Liquidity |
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