Study On Liquidity Imbalance Of Broad Money In China

Since 2003, Liquidity had become a focus of macro economy because China experienced liquidity imbalance cycle from excess liquidity to the insufficient liquidity. Besides great realistic meaning, since the liquidity as a macro economic variable in the 1960s was put forward, it also had academic meaning because traditional economic theories were challenged. And more important, it had important practical significance for the sustainable development to do research on our country's economic imbalances liquidity.The concept of liquidity is defined and three-dimensional connotation which is spatial dimension, time dimension and value dimension is put forward in this paper on the basis of research results at home and abroad. And on the premise of the definition of the concept, the differentiation of related notion is clarified.Based on the theoretical analysis and the Non-Walrasian Equilibrium, with the spatial dimension as liquidity, we selected the indics of liquidity imbalance and determined the basic state of china's liquidity: from 2003 to the end of 2005, it was excess liquidity in China and from 2006; the state of liquidity was the contrary. The short-time replacement of the state of liquidity implicated the structure unbalance in China's economy. The analysis of transmission showed that liquidity between the three bodies is not free-flowing. With the research on the cause of short-time replacement of liquidity state, it was indicated that there was crowding-out effect from real economy to virtual economy which caused structural unbalance of liquidity in both economy.In order to study the formation mechanism of liquidity imbalance systematically, we analyzed the factors of liquidity in the premise of single variable and it was indicated that money multiplier was the important factors affect liquidity ,and between the factors constituted of money multiplier, required reserve ratio and regular ratio was of the greatest contribution, furthermore, the increase of broad money maybe due to the release of money monetary aggregates by central bank to stimulate economy in long term; it existed structural problems for the transmission from monetary aggregates to GDP, for example, the impeded transmission path through interest rate and wealth effect though stock market and between the three carriage pull economy, the international trade was of the biggest contribution to output otherwise the contribution of consumption and investment rate was less. After 2007, although the international trade was suffered serious impact because of financial crisis, the input effect of liquidity aboard was less important than domestic factors. The main reason of China's liquidity imbalance was also domestic.The impact of liquidity to economy was also researched in the meaning of value dimension and it can be concluded that liquidity imbalance cause the loss of central bank's monetary policy; liquidity imbalance also had obvious influence on microeconomic variable which could be showed in the negative correlation of excess liquidity and GDP and increasing risk of enterprise. In the condition of liquidity imbalance, variables ran counter to theory, and, among all kinds of price indics, PPI was suffered the most serious impact no matter what excess or insufficient which caused PPI can not be transmitted to CPI effectively. In addition, liquidity imbalance had direct effects on investment structural and stock price.With multicomponent reaction and feedback effect, path analysis was used to research on structural problems, and at least three conclusions could be obtained: at first, the structural imbalance in spatial dimension was showed by not free-flowing among the three bodies of liquidity; the second, it was inconsistence of virtual economy and real economy brought about self-propelling cycle of virtual economy, which was the deep-seated reason of China's liquidity imbalance; and the third, there was imbalance of money aggregate transmission path in real economy.Based on the former research, through grey relational analysis and principal component analysis, sixteen indices were selected to make up warning index system of China's liquidity imbalance, and it can be concluded that in the next twelve months, China will still faces a serious imbalance of liquidity through fuzzy evaluation method.Based on the present situation of Chinese liquidity imbalance, pointed suggestions were brought forth form two dimension and three lays, which were amount control by monetary policy, supervision of credit and loan, guide of capital market and using supporting policies.