al-Nowaihi, Ali; Dhami, Sanjit - Department of Economics, Leicester University - 2011
Given the recent experience, there is growing interest in the liquidity trap; which occurs when the nominal interest … Treasury and the Central Bank, we find that the optimal institutional response to the possibility of a liquidity trap has two … Treasury's behavior. However, when there is the possibility of a liquidity trap, if monetary policy is delegated to an …