Krachs financiers ou trappe à liquidité. Le dilemme des politiques monétaires non conventionnelles

This paper examines quantity-targeting monetary policy in a two-period economy with fiat money, endogenously incomplete markets of financial securities, backed by collateral. Non-conventional monetary policy of injecting money results in three scenarios compatible with the equilibrium conditions: 1) the economy enters a liquidity trap; 2) thanks to money creation, markets function orderly at the cost of inflation; 3) the money fuels a financial bubble whose bursting leads to debt-deflation. This dilemma of monetary policy highlights the default channel affecting trades, and provides a rigorous foundation to Fisher?s debt deflation theory as being distinct from Keynes? liquidity trap. Classification JEL : D50, E40, E50, E52, G38.