Excess Monetary Liquidity、Noise Trading and Asset Price Volatility

Excess liquidity and investment behavior are two important factors of asset prices,this paper introduces the excess liquidity into DSSW model,and takes the phases empirical test combining our capital market operation condition.And find that excess liquidity and asset prices remain co-integration relationship in the stable operation period of capital market,but have no conduction in the period of excessive volatility of capital market,at same time the investment behavior become the dominant factors of asset prices.On the Sample observation period from 2000,excess liquidity is not necessarily factors of the raise in asset prices,but has potential impact and uplifting on asset prices.