money bitcoin. Oh wait …
More seriously, send me information.
I’m sure Cats recall a story explaining liquidity traps. The story goes along the lines of a businessman paying a cash deposit to an innkeeper in a small town. The innkeeper then uses the cash to pay his debts. The innkeepers creditor then uses the cash to offset his debts, and so on. Eventually the entire town has paid their debts and the cash is back in the hands of the innkeeper. At this point the businessman changes his mind and the deposit is refunded. The point being that an injection of cash would be a good thing.
I seem to recall that Paul Krugman originally told this story. But … I can’t find it anywhere. Krugman uses a story about a babysitting co-op to illustrate the liquidity trap.
So my question is: can anyone tell me who first told the story and were I can find it?