Protectionism in a liquidity trap

Wolfgang Lechthaler

This paper studies the effects of protectionism as a business cycle instrument. In normal times, protectionism reduces international trade, distorts production and reduces output. However, in a liquidity trap protectionism lowers the real interest rate because inflation goes up while the nominal interest rate is stuck at the zero lower bound. This stimulates consumption and output.

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Year of publication:	June 2016
Authors:	Lechthaler, Wolfgang
Publisher:	Kiel : Kiel Institute for the World Economy
Subject:	Business cycle policy \| Protectionism \| Liquidity trap \| Protektionismus \| Liquiditätspräferenz \| Liquidity preference \| Theorie \| Theory \| Geldpolitik \| Monetary policy \| Konjunktur \| Business cycle \| Offene Volkswirtschaft \| Open economy

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Extent:	1 Online-Ressource (circa 8 Seiten) Illustrationen
Series:	Kiel working paper. - Kiel : [Verlag nicht ermittelbar], ISSN 1862-1155, ZDB-ID 2107612-1. - Vol. nr. 2042
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Other identifiers:	hdl:10419/142221 [Handle]
Classification:	E12 - Keynes; Keynesian; Post-Keynesian ; E60 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook. General ; F13 - Commercial Policy; Protection; Promotion; Trade Negotiations
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011488621