Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

The USA is not in a liquidity trap anymore: "The output gap can be [estimated] by attempting to measure slack directly… …The ratio of employment to prime age (25 ...

What Is a Liquidity Trap? A liquidity trap happens when an economy is in a recession but interest rates are already the lowest they can go, 0%, which is also known as the “zero lower bound.” What else ...

When I was studying economics, the idea that an economy might face a “liquidity trap” seemed absurd. Basically, the concept of the liquidity trap was that the monetary authorities could not “push on a ...

Author’s note: Just four hours after the publication of this article, the Federal Reserve has in fact made an unscheduled rate cut to zero percent and said it would restart quantitative easing, ...