Mankiw with a Flurry of Punches Against Krugman

Harvard professor and the world's greatest economic textbook salesman, Greg Mankiw, writes:

In a recent blog post, Paul Krugman writes:

As far as I know, among basic textbooks only Krugman/Wells even talks about the liquidity trap.

This is probably a true statement.  It is not that other books don't cover the topic, however.  It is just that Paul Krugman doesn't know it.

FYI, here is what the leading introductory text says about the topic:

The Zero Lower Bound

As we have just seen, monetary policy works through interest rates. This conclusion raises a question: What if the Fed’s target interest rate has fallen as far as it can? In the recession of 2008 and 2009, the federal funds rate fell to about zero. What, if anything, can monetary policy do then to stimulate the economy? 

Some economists describe this situation as a liquidity trap. 

Then, of course, there was Murray Rothbard, who smashed the concept to smithereens in 1995.