Nobel economist and New York Times columnist Paul Krugman is fond of mocking his critics for being ideologues rather than economists. In contrast, Krugman’s own policy prescriptions, he assures us, are based wholly on sound economic science.

Case in point is the theory of liquidity traps, which goes back to Keynes. An economy is said to be in a liquidity trap when the central bank is powerless to stimulate economic growth because the public demand for liquidity has become limitless. This could happen when interest rates have been driven down to zero, a situation in which people may prefer holding cash to consuming or investing.