2010•Journal of Shijiazhuang of University of EconomicsRequires access
The Correlation between Monetary Liquidity and Bond Trading:Based on an Empirical Test of Chinese Exchange Market
Zhang Xi-song
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Abstract
Although bond market plays the function of core financial market,Chinese bond market is distorted,and especially the exchange market is marginalized.Monetary liquidity affects bond trading through the price mechanism and alternative effect.The empirical study indicates that there is negative correlation between Chinese monetary liquidity and bond trading.Chinese monetary liquidity is the Granger cause of bond trading,but not the case in vice versa.Therefore,it is needed to improve the circulation mechanism of bond market,to focus on the introduction of large exchange mechanism and market maker trading system of exchange bond market,at the same time to promote the unified process of bond market.