Does a Liquidity Trap Really Turn Economic Laws Topsy-Turvy?

by Don Boudreaux on September 13, 2011

in Myths and Fallacies, Reality Is Not Optional, Seen and Unseen, State of Macro

Steve Sexton, over at Freakonomics, argues not.  (HT James McCammon)

This post by Sexton is an example of the economic way of thinking at its finest.  And it’s a better response than my own to Krugman’s insistence that a liquidity trap nullifies some of the basic laws of economics.


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