Gauti Eggertsson is a professor of economics at Brown University. Previously, he worked at the research departments at the International Monetary Fund and the Federal Reserve Bank of New York. He joins the show to discuss his work on the history of liquidity traps and extremely low and even negative interest rates. He and David discuss examples from the Great Depression to Japan in the 1990s to today. Gauti also shares his thoughts on the Fed's quantitative easing (QE) program and why it failed to return the economy back to normal. David's blog: http://macromarketmusings.blogspot.com/ Gauti's Brown University homepage: https://sites.google.com/site/gautieggertsson/home David's Twitter: @davidbeckworth Related links: "The Zero Bound on Interest Rates and Optimal Monetary Policy" by Gauti Eggertsson and Michael Woodford https://www.brookings.edu/bpea-articles/the-zero-bound-on-interest-rates-and-optimal-monetary-policy/ "Great Expectations and the End of the Depression" by Gauti Eggertsson https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr234.pdf "The Fed's Dirty Little Secret" by David Beckworth http://people.wku.edu/david.beckworth/fed_dirty.pdf "Japan's Trap" by Paul Krugman https://www.princeton.edu/~pkrugman/japans_trap.pdf

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“What did the council decide on item 42?” — answered with the speaker and the moment.