Protectionism in a liquidity trap
Wolfgang Lechthaler
No 2042, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)
Abstract:
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.
Keywords: Business cycle policy; Protectionism; Liquidity trap (search for similar items in EconPapers)
JEL-codes: E12 E60 F13 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ger, nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://www.econstor.eu/bitstream/10419/142221/1/861752538.pdf (application/pdf)
Related works:
Journal Article: Protectionism in a liquidity trap (2016) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:2042
Access Statistics for this paper
More papers in Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().