> Q: Isn't the absence of good avenues for investiment for an increasing
> surplus
> part of a liquidity trap? Capital sitting around in money form and no
> place
> worth putting it? Or do I misunderstand what a liquidity trap is?
Capitalists' liquidity preference can surely be overcome if the expected rates of profit are adequate. Overaccumulation has been described as,"a state in which there is a significant mass of excess capital in the economy, which cannot be invested at the average rate of profit normally by owners of capital." (Glossary in Mandel's Late Capitalism) The question then is why there is periodic decline in overall profitability on the total capital employed in the system.
Ulhas