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Animal Spirits
Animal spirits is Keynes’s name for the non-model confidence that makes people invest or refuse to — the residual when rates and cash flows are not enough to explain the tape.
Keynesian Multiplier
The Keynesian multiplier is how much equilibrium output changes for a one-unit change in autonomous spending, set by the marginal propensity to consume and leakages (tax, imports).
Liquidity Trap
A liquidity trap is a state where the policy rate is at or near the effective lower bound and extra money is hoarded rather than spent, so conventional rate cuts stop working.
Animal Spirits
Animal spirits is Keynes’s name for the non-model confidence that makes people invest or refuse to — the residual when rates and cash flows are not enough to explain the tape.
Keynesian Multiplier
The Keynesian multiplier is how much equilibrium output changes for a one-unit change in autonomous spending, set by the marginal propensity to consume and leakages (tax, imports).