The world had been overleveraging in pre-financial crisis. Post Lehman scathe, there has been talks of deleveraging and the liquidity including debt which seem like a trap again. Paul Krugman from Princeton University and Gauti B. Eggertsson (NeyYork Fed) talk about Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach.
The approach sheds considerable light both on current economic difficulties and on historical episodes, including Japan’s lost decade (now in its 18th year) and the Great Depression itself.
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