Trapped In Liquidity? Paul Krugman

Trapped In Liquidity? Paul Krugman seems to share the IMF’s assessment that Germany is on the brink of deflation. That is a scary thought. And there is probably something to it – although I don’t think the recently reported inflation numbers accurately reflect what’s happening to prices in Germany right now, just as they weren’t accurately reflecting the price jump that occurred in the beginning of 2002. But before being able to assess the damage being done, here’s Paul Krugman’s NY Times edition of his lecture on the liquidity trap.