Keynes effect

noun

The phenomenon in which a decrease in price level leads to a decrease in interest rates, provided there's no liquidity trap or interest-unresponsive expenditure.

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Meanings

nounKeynes effect (plural Keynes effects)

plural Keynes effects

  1. economicsThe phenomenon in which a decrease in price level leads to a decrease in interest rates, provided there's no liquidity trap or interest-unresponsive expenditure.

Origin

Named after English economist John Maynard Keynes.

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Cite this entry
APA

Keynes effect. (n.d.). In WatkinsX Dictionary. Retrieved November 3, 2026, from https://dictionary.watkinsx.com/word/Keynes%20effect

MLA

“Keynes effect.” WatkinsX Dictionary, https://dictionary.watkinsx.com/word/Keynes%20effect. Accessed November 3, 2026.

Chicago

WatkinsX Dictionary, s.v. “Keynes effect,” accessed November 3, 2026, https://dictionary.watkinsx.com/word/Keynes%20effect.

Source: Keynes effect on Wiktionary, CC BY-SA 4.0.