Research On China Currency Liquidity Shocks Problem On The Condition Of Open Economy

In an open economy background, Choosing liquidity shocks as a starting point to research the impact China’s external imbalances on internal imbalances have strong theoretical value and practical significance From the theoretical value, the paper basis on theory of inside and outside equilibrium, on the liquidity perspective, to research the impact on China’s external imbalances and internal imbalances, helping to deepen understanding of the relationship between external and internal imbalances between. By exploring the reasons for the formation of liquidity shocks, to explore the role and mechanism of excess money supply imbalances between external and internal imbalances played, help drive the proliferation of global liquidity backdrop further development monetary theory. From a practical sense: First, several of the outbreak of the global financial crisis, the world’s major economies have launched massive economic stimulus plan to inject massive liquidity economy for financial market, as a result the world is awash with liquidity. Therefore, the analysis of liquidity problems, it helps to understand the mechanism of liquidity has an effect on the Chinese economy and prevent the liquidity risk. Second, since China accession WTO, using its own endowment, continues to participate in the international division of labor, and in the process, form the basic pattern of China’s participation in the international division of labor that the use of the advantages of low labor costs and technology bring from the international investment and international markets.While promoting economic growth, it also brings the Double Surplus, thus accumulated a high level of foreign exchange. China’s central bank to hedge foreign exchange had a lot of release from the base currency of China’s economic internal demand, thereby forming a Chinese liquidity shocks. Therefore, the analysis of external imbalances and liquidity issues, helps to understand how the impact of China’s external imbalance is running smoothly inside China’s economy, China’s economy will help manage external imbalances, to better achieve the smooth running of China’s economy. Third, due to the imperfections of China’s financial markets, both unable to provide financial products to be accommodating monetary excess can not be translated into effective investment. Thus, external imbalances caused by excess money form the body of the Chinese economy liquidity shocks. Under liquidity shocks, China emerged with the rapid growth of real estate prices, represented by the sharp rise in asset prices, while the rapid growth of real estate prices, further exacerbating China’s economic internal imbalances, which rely on investment, especially in fixed asset investment and export-led economic growth while consumer role in promoting economic growth declining. Therefore, the role of research in touch with liquidity shocks and internal imbalances between the Chinese economies, the Chinese economy will help manage internal imbalances, help to deepen understanding to establish and improve China’s financial market, China’s economic growth mode transformation of special significance.As for research and ideas, the paper first causal imbalances formation and liquidity shocks between external through research reveals that the formation of the root causes of liquidity in the international division of labor, China’s financial industry and technological innovation capability does not have the international competition force. Then this paper analyzes the central bank balance sheet as its starting point, the immediate source of liquidity shocks- each of broad money(M2) in increments of study, in this study, also proved to issue central bank bills as the main means of hedging liquidity shocks monetary policy has been unable to effectively alleviate liquidity shocks. Following the specific degree of liquidity shocks were measures, because there are more factors associated with liquidity shocks generated, so th the results can aviod exist error. Therefore, the paper selects the non-state-owned enterprises financing difficulties for the study, by constructing a theoretical model equation, revealing the non-state-owned enterprises financing difficulties can exacerbate liquidity shocks. After this part research, the root cause of Chinese liquidity shocks, fluctuations in the law, direct source and unaffected monetary policy form a complete understanding of the relationship for the next analysis liquidity shocks and internal imbalances between for prepareing. So, liquidity how to shock China’s internal imbalances? Through theoretical analysis and empirical research to explain the impact of liquidity through asset prices canal right, internal imbalances have an effect. So theoretical analysis and empirical research to explain the impact of liquidity have an effect on the internal imbalances through asset price channels. So far, the paper completed liquidity shocks, the interaction between internal and external imbalances Chinese economy, the theoretical mechanism by analysis and empirical research. Finally choosing evolutionary game theory as an tool for liquidity crisis, after outbreak of the liquidity crisis, analysis financial institutions and regulatory bodies how to make decision, it provide a theoretical reference for the government to ease the liquidity crisis.The innovation of this article is mainly reflected in:Firstly, it expands the scope of the liquidity problems. Different from the common type of only analysis the excess liquidity impact on China’s economic, this article includes not only the excess liquidity shock type, but also covers insufficiency liquidity shocks and liquidity crisis. And the use excess liquidity and lack of impact analysis of its impact on the domestic and foreign imbalances mechanism. The forming mechanism of the liquidity crisis was analyzed theoretically. In this paper, the analysis of such liquidity shocks covered, from the general(including the type of excess and deficiency type) to extreme situations.Second, it owns the relatively new research perspective. This article does not completely rely on IS-LM-BP model under the open economy, China by internal and external imbalances, but starting from the reasons for the formation of liquidity shocks, to explain the amount of money the central bank issued more than the actual needs of Chinese economy such behavior The reason, then study the liquidity impact on the domestic and foreign imbalances. Thus, from the microscopic study of financial theory as a starting point, with the advancement of research in monetary theory and analysis of internal and external macroeconomic imbalances, open up channels of micro-finance theory and macro monetary theory in the research process, thus revealing the mechanism of formation of liquidity shocks China and its close ties with the internal and external imbalances between.Thirdly, the paper analyzes the formation of the research process Double Surplus China, the theoretical analysis of the process by building a theoretical model, a more detailed discussion of the role of financial development and technology gap differences in the formation of the international division of labor and the vertical process. In the empirical study, the building contains a large sample of the world’s 68 countries panel data, and then the income level of the country is subdivided into four categories, the combination of different types of countries, expands the empirical research to ensure the accuracy of scientific research findings, is a relatively new innovation.The main conclusions of this study include:First, China’s excess liquidity shocks, including shocks and insufficient impact of two types, both are different types of impact money supply and real money demand direction, the number of deviations, and the follow-up even before the impact of the two types.Second, a country’s financial industry is relatively more manufacturing has comparative advantage in the international division of labor, and the higher the degree of financial development, the improvement of financial markets, the greater the likely current account deficit; at the same time, the lower the population dependency ratio, the more government surpluses much lower per capita GDP, the less the listed company’s total capital, the more prone the current account surplus.Third, non-state-owned enterprises financing difficulties will induce the formation of Chinese liquidity shocks, and when non-state-owned enterprises to improve the financing environment, financing has risen, to ease the impact of liquidity in China.Fourth, liquidity shocks can affect asset prices through internal channels to balance China’s economy, the impact of internal balance China’s economy, depressing consumption and stimulate investment, particularly investment in fixed assets, exacerbated by internal imbalances of the Chinese economy.Fifth, the presence of modern financial market liquidity reversal enlarged to a liquidity crisis mechanism, once the liquidity crisis, due to the liquidity crisis in the money market system has the characteristics of nature, the government intervention into the market liquidity more feasible policy options. In this process for receiving government bailout of financial institutions to establish tax relief, make government bailout policy to benefit all market investors.