The "trap" of this name occurs when an increase in the money supply does not result in a fall in the interest rate but merely in the creation of idle balances.
The "trap" of this name occurs when an increase in the money supply does not result in a fall in the interest rate but merely in the creation of idle balances. In recent times it has been measured by the degree of freedom an asset has from the risk of fluctuation in capital value, while the traditional measure considers how readily an asset can be converted into money. FTP, what is this economic measure of an asset's "nearness" to free spending power?
The "trap" of this name occurs when an increase in the money supply does not result in a fall in the interest rate but merely in the creation of idle balances.
liquidity