JOHN MAYNARD KEYNES, Macroeconomist and CHARLES JEROME WARE, Microeconomist & Attorney: The "LIQUIDITY TRAP"

During his lifetime, John Maynard Keynes, a British economist subject, achieved great fame as the world's foremost macroeconomist.

Keynes, also known affectionately as "1st Baron Keynes of Tilton" (born June 5th, 1883, died April 21st, 1946), developed ideas, known as "Keynesian economics", had a major impact on modern economic and political theory and on the fiscal and financial policies of many governments.

Keynes also had remarkable achievements as an investor. In an eighteen-year period encompassing the Great Depression and World War II, the "Keynes Chest Fund" investment portfolio grew 5-fold; which was a remarkable performance given that the United Kingdom stock market fell 15-percent during the same period.

John Maynard Keynes made and lost fortunes speculating. He was known to warn investor novices about the dangers of trying to match their intellects against the vagaries of financial markets by stating:

"Markets can remain irrational for longer than you or I can remain solvent." J

[www.maynardkeynes.org; John Marynard Keynes, "The Collected Writings of John Marynard Keynes," 26, MacMillan: London (1980); Nicholas Jenkins, "John Maynard Keynes, 1st Baron Keynes" (17810), W.H. Auden - 'Family Ghosts', Stanford University; Robert Skidelsky, "John Maynard Keynes: 1883-1946: Economist, Philosopher, Statesman, Pan MacMillan Publ. (2003)]

It is macroeconomist John Maynard Keynes who first proposed the economic malady "liquidity trap", which can be caused when people hoard cash because they expect an adverse event such as deflation, insufficient aggregate demand, or war. In Keynesian economics, a "liquidity trap" situation can occur also when injections of cash into the private banking system by a central bank (the Federal Reserve) fail to lower interest rates and therefore fail to stimulate economic growth.

[see, Charles Jerome Ware, "The Keynesian Liquidity Trap: Is it Real Or Just An Illusion?", Boston University Graduate School of Management (1975): (Quote) The Keynesian Liquidity Trap is a "floor", R1, below which interest rates on bonds will not fall; John Maynard Keynes, The General Theory of Employment, Interest and Money, Macmillan (1936)]