Krugman argues that Japan's stagnation in the 1990s, with short-term interest rates pinned near zero and conventional monetary expansion seemingly powerless, is a genuine instance of the classical …
PublishedClassicQuarterly Journal of EconomicsPublished Aug 1991
Krugman presents a highly simplified continuous-time model of how an exchange rate behaves inside a credible target zone -- a band the authorities are committed to defend at its edges, but need not …