liquidity trap

noun

circumstance when nominal interest rates are near or at zero and circulating additional money doesn't lower interest rates.

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Meanings

nounliquidity trap (plural liquidity traps)

plural liquidity traps

  1. economicscircumstance when nominal interest rates are near or at zero and circulating additional money doesn't lower interest rates.
Cite this entry
APA

liquidity trap. (n.d.). In WatkinsX Dictionary. Retrieved November 5, 2026, from https://dictionary.watkinsx.com/word/liquidity%20trap

MLA

“liquidity trap.” WatkinsX Dictionary, https://dictionary.watkinsx.com/word/liquidity%20trap. Accessed November 5, 2026.

Chicago

WatkinsX Dictionary, s.v. “liquidity trap,” accessed November 5, 2026, https://dictionary.watkinsx.com/word/liquidity%20trap.

Source: liquidity trap on Wiktionary, CC BY-SA 4.0.