Protectionism in a liquidity trap

Arbeitspapier

This paper studies the effects of protectionism as a business cycle instrument. In normal times, protectionism reduces international trade, distorts production and reduces output. However, in a liquidity trap protectionism lowers the real interest rate because inflation goes up while the nominal interest rate is stuck at the zero lower bound. This stimulates consumption and output.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Kiel Working Paper ; No. 2042

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General ; Trade Policy; International Trade Organizations
• Subject: Business cycle policy ; Protectionism ; Liquidity trap

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lechthaler, Wolfgang
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/142221
• Last update: 10.03.2025, 11:41 AM CET