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Response to Keynesian Overview of Interest rates.

from JOAO FRANCISCO DE AGUIAR (JF.AGUIAR@UOL.COM.BR)
KEYNES CONCLUDED THAT WHEN THE ECONOMY REACHES A CONDITION IN THAT THE POPULATION EXPECTATIVES ARE NEGATIVE THEY TEND TO STICK TO THEIR MONEY AS IT WAS THEIR LAST RESORT, NAM,ED IT THE "LIQUIDY TRAP". WHEN THIS SITUATION OCCURS ( 1930 TO 1936 ?!) MONEY OFFER DOES NOT MEANS ANYTHING, BECAU SE ALL MONEY THAT THE CENTRAL BANK INJECTS PEOPLE WILL RETAIN, AS THEY ARE AFRAID TO SPEND IT. THE ONLY WAY OUT OF IT IS THE GOVERNMENT ACTS CREATING JOBS, SPENDING OPENING NEW AREAS AND OPPORTUNITIES OF WORK, CHANGING THE NEGATIVE EXPECTATIVES OF CONSUMERS AND INVESTORS. tHIS IS JUST AN IDEA.
(posted 7265 days ago)

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