2012•Journal of Changchun University of TechnologyRequires access
Research on conduction mechanism of liquidity through the VAR model analysis
Wang Bing-yang
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Abstract
This article divides liquidity into three different levels,which are monetary liquidity,liquidity of financial institutions and market liquidity.Through the VAR model analysis of the domestic data,we find that monetary liquidity has a positive impact on the liquidity of financial institutions and market liquidity,while the liquidity of financial institutions and market liquidity have a effect on monetary liquidity,too.So the central bank can affect the monetary liquidity through monetary policy operations,and then adjust the liquidity of financial institutions and market liquidity;we should also maintain the liquidity of the financial markets,to avoid the atrophy of financial institutions' liquidity and monetary liquidity,which may trigger a financial crisis.