tag:blogger.com,1999:blog-8487128531050281473.post3655227139242622103..comments2024-01-08T14:24:03.718+00:00Comments on Economics Essays: Overcoming a Liquidity TrapTejvan Pettingerhttp://www.blogger.com/profile/03405988099792035111noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-8487128531050281473.post-50381330139773860812009-10-08T05:58:01.407+01:002009-10-08T05:58:01.407+01:00I think it Should there be no bound on the nominal...I think it Should there be no bound on the nominal interest rate, liquidity traps will not happen,because aggregate demand and supply can be balanced at negative nominal interest rates.<br />Negative nominal interest rates imply negative nominal returns to capital.8 Since earnings can hardly be negative, negative nominal returns to capital can only result from nominal capital price depreciation.<Anonymousnoreply@blogger.com