Krachs financiers ou trappe à liquidité. Le dilemme des politiques monétaires non conventionnelles

Antonin Pottier and Gaël Giraud

Revue économique, 2013, vol. 64, issue 3, 561-571

Abstract: This paper examines quantity-targeting monetary policy in a two-period economy with fiat money, endogenously incomplete markets of financial securities, backed by collateral. Non-conventional monetary policy of injecting money results in three scenarios compatible with the equilibrium conditions: 1) the economy enters a liquidity trap; 2) thanks to money creation, markets function orderly at the cost of inflation; 3) the money fuels a financial bubble whose bursting leads to debt-deflation. This dilemma of monetary policy highlights the default channel affecting trades, and provides a rigorous foundation to Fisher?s debt deflation theory as being distinct from Keynes? liquidity trap. Classification JEL : D50, E40, E50, E52, G38.

JEL-codes: D50 E40 E50 E52 G38 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Krachs financiers ou trappe à liquidité. Le dilemme des politiques monétaires non-conventionnelles (2013)
Working Paper: Krachs financiers ou trappe à liquidité. Le dilemme des politiques monétaires non-conventionnelles (2013)
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