The Liquidity Trap Isn't Likely To Be Sprung

Despite the Federal Reserve Board's recent easing, many observers fear that the economy is caught in what John Maynard Keynes termed "a liquidity trap," in which falling interest rates fail to revive flagging business activity. They note that debt-burdened households and businesses are reluctant to borrow more, and banks are clearly skittish about making new loans.

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