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Cited by 361

The DOI matches its Crossref record; 68 of the 68 references it cites were found in a registry or an index.

Liquidity Trap and Excessive Leverage

Open access
Korinek, Anton, Simsek, Alp·2016·American Economic Review
DOI 10.1257/aer.20140289
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Abstract

We investigate the role of macroprudential policies in mitigating liquidity traps. When constrained households engage in deleveraging, the interest rate needs to fall to induce unconstrained households to pick up the decline in aggregate demand. If the fall in the interest rate is limited by the zero lower bound, aggregate demand is insufficient and the economy enters a liquidity trap. In this environment, households' ex ante leverage and insurance decisions are associated with aggregate demand externalities. Welfare can be improved with macroprudential policies targeted toward reducing leverage. Interest rate policy is inferior to macroprudential policies in dealing with excessive leverage. (JEL D14, E23, E32, E43, E52, E61, E62)

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Metadata

Authors
Korinek, A., & Simsek, A.
Venue
American Economic Review
Publisher
American Economic Association
Published
2016-03-01
Volume
106
Issue
3
Pages
699-738
ISSN
0002-8282 (ISSN-L)
DOI
10.1257/aer.20140289
OpenAlex
W3121143077
Cited by
361
References
68
FWCI
75.45
Type
journal article
Language
en
Open access
bronze

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CoChat. (2026). Citation check: Liquidity Trap and Excessive Leverage. https://app.cochat.ai/papers/10.1257/aer.20140289
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Korinek, A., & Simsek, A. (2016). Liquidity Trap and Excessive Leverage. American Economic Review. https://doi.org/10.1257/aer.20140289

Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.