The world's in a 'global liquidity trap'. What does that mean for Australia?

Last week, something notable occurred.

Two days out from the US presidential election, the chief economist of the International Monetary Fund issued a warning.

She said the global economy was in a "liquidity trap".

"For the first time, in 60 per cent of the global economy — including 97 per cent of advanced economies — central banks have pushed policy interest rates below 1 per cent. In one-fifth of the world they are negative," Gita Gopinath warned.

"With little room for further rate cuts, central banks have deployed unconventional methods.

Read more: https://www.abc.net.au/news/2020-11-08/the-world-economy-is-in-a-global-liquidity-trap/12861324