Money demand elasticity, effective money supply and money market disequilibrium: “China’s Puzzle” and long-term excessive liquidity
LI Zhiguo
Author information-
School of Management, Fudan University, Shanghai 200433, China;
Abstract
Chinese excessive liquidity problems are more serious than other main countries. The upgrading industrial structure and the increasing opening degree lead to the excessive money demand and higher money demand elasticity. Bad credits weaken money supply effectiveness and lead to illusive increasing money. We set up the money market disequilibrium model under the condition of the excessive liquidity. The imbalance between money demand and money supply is the key of Chinese excessive liquidity problems.
Keywords
excessive liquidity, money demand elasticity, efficient money supply, disequilibrium model
Cite this article
LI Zhiguo. Money demand elasticity, effective money supply and money market disequilibrium: “China’s Puzzle” and long-term excessive liquidity. Front. Econ. China, 2008, 3(2): 209‒222 https://doi.org/10.1007/s11459-008-0009-5
