| The spillover effects of changes in global liquidity on countries around the world have become an important issue of concern in academia and society.Since the 21 st century,major developed countries have conducted large-scale monetary easing multiple times,with policy interest rates remaining at low levels for most of the time.Excess global liquidity has emerged as an important problem that troubles economies around the world.Among them,developed countries are important sources of liquidity outflows,while emerging markets and developing countries are the main destinations for liquidity inflows.The latter,in turn,through private or official outward capital flows,return some of the excess liquidity to developed countries.The monetary easing of major countries in the world has generated a large amount of liquidity,particularly since the 2008 financial crisis,when major countries generally adopted unconventional monetary policies.The loose global liquidity effect was stronger and more volatile,with a large amount of excess liquidity flowing into other countries’ real economies,financial markets,and credit markets through spillover effects,leading to rising inflation pressures,asset bubble accumulation,and the emergence of zombie companies.Moreover,as unconventional monetary policies are increasingly implemented,the impact of spillover effects also increases,posing great challenges to the stable development of a country’s economy and finance,as well as external risk prevention.On the contrary,when major countries around the world begin to tighten monetary policy,global liquidity will be in a tight state.Although theoretically,this may help developed countries implementing contractionary policies to contain excess liquidity overflow within their own system,it may lead to a relief of inflation,asset bubble and corporate zombification.However,this may not be good news for emerging market countries that are the primary targets of global liquidity overflow.First,the economic development of emerging market countries depends heavily on the high productivity brought about by international capital inflows.Once global liquidity tightening leads to the interruption of capital inflows,emerging market economies may become stagnant or even trigger a crisis.Second,as unconventional ultra-loose policies prevail in major countries and the marginal effects of policy implementation decrease,it becomes increasingly difficult to exit these policies.Once ultra-loose policies cannot achieve a smooth exit,they will once again have a negative impact on the economic and financial stability of emerging market countries and even the global economy.Under the impact of the global liquidity overflow effect,the Chinese economy and finance are also not immune.Since the 21 st century,different stages of loose and tight global liquidity have brought varying degrees of impact on China’s real economy,financial market,and credit market.Therefore,this article,based on a global perspective and focusing on China’s issues,uses a combination of historical analysis,theoretical models,and empirical testing methods to comprehensively analyze the impact of changes in global liquidity on China’s real economy inflation,financial market asset bubbles,and the zombification of credit markets.This article first reviews and summarizes the historical background and related literature on the impact of global liquidity in Chapters One and Two,providing realworld examples and theoretical basis for this study.The results show that the spillover effects of global liquidity do exist,and historical background and past research indicate that changes in global liquidity will bring about spillover effects on a country’s real economy inflation,financial market asset bubbles,and credit market zombie enterprises.In Chapter Three,the article explores the initial definition and intrinsic properties of liquidity,attempting to accurately define the connotation of liquidity,and based on the intrinsic definition of liquidity,introduces its important extension definition,namely global liquidity.Based on the accurate definition of global liquidity,the article uses various methods to measure and compare global liquidity horizontally and ultimately selects the quantity method based on broad money supply and real exchange rate to measure global liquidity as the research subject for subsequent empirical research.In addition,this chapter also describes the global liquidity loosening and tightening situations caused by the monetary policies of major economies since the 21 st century,using factual evidence to verify the accuracy of the liquidity measurement results in this article.Then,in Chapters Four,Five,and Six,the article uses a combination of historical case analysis,theoretical analysis,and empirical analysis to measure the impact of global liquidity on China’s real economy inflation,financial market asset bubbles,and credit market zombie enterprises,while also analyzing the time-varying effects among these three directions of global liquidity.Because the impact of global liquidity on these three directions is different,the article selects different empirical models according to the impact mechanisms described in different theoretical model chapters: Chapter Four uses the TVP-SV-VAR model,Chapter Five uses the LT-TVPSV-VAR model,and Chapter Six uses both the LT-TVP-SV-VAR model and the nonequilibrium panel data model.Empirical results from chapters four to six show that:Firstly,there is a clear positive impact of global liquidity on China’s inflation level,with the primary intermediate transmission channel being commodity market prices.When global liquidity is loose,China faces inflationary pressure,while inflationary pressure is reduced when global liquidity is tight.Before the 2008 financial crisis,the positive impact of global liquidity on China’s real economy and inflation was relatively low,but after the crisis,the impact continued to strengthen,which may be related to the unconventional monetary policies such as zero interest rates and quantitative easing adopted by major capitalist countries since 2008.Secondly,regarding the time-varying impact of global liquidity on China’s stock market bubble,when there is a positive impact of global liquidity,there is a significant positive impact on the stock market bubble.However,the degree of impact varies over time: during a loose global liquidity cycle,the positive impact of global liquidity on China’s stock market bubble rapidly increases and is at a high level,while during a tight global liquidity cycle,the negative impact of global liquidity on China’s stock market bubble decreases.However,the magnitude of the diminishing effect quickly decreases to a low level,possibly because as the stock market bubble is gradually squeezed out,the marginal effect of global liquidity tightening on reducing the stock market bubble correspondingly decreases.Regarding the time-varying impact of global liquidity on China’s real estate market bubble,loose global liquidity significantly promotes the accumulation of China’s real estate market bubble.In addition,the diminishing impact of global liquidity on China’s real estate market bubble has increased since 2015.This may be due to China’s own adjustment measures for the real estate market and its adherence to the stable development tone of "housing is for living,not for speculation".Therefore,it can be seen that China’s policy regulation may play a key role in the degree of financial market bubbleization under the influence of global liquidity.Thirdly,although the global liquidity situation has an impact on China’s corporate zombification,the impact is asymmetric.Specifically,(1)loose global liquidity exacerbates China’s corporate zombification,but tight global liquidity does not necessarily reduce China’s corporate zombification and may even lead to further exacerbation.(2)The reason for this asymmetric impact is the cost-shifting behavior of zombie companies: when global liquidity tightens,China’s zombie companies shift their credit costs to non-zombie companies,allowing zombie companies to survive on low-interest loans while some normal companies may evolve into zombie companies as a result.(3)The intensification of competition among domestic banks in China amplifies the impact of global liquidity on corporate zombification,making effective constraints and supervision of banks crucial.(4)The promotion effect of monetary easing on China’s corporate zombification since 2020 is less than the previous two cycles of easing,which is inseparable from China’s calm monetary policy response and the measures to increase the disposal of zombie companies,once again highlighting the role of China’s own policy regulation.Fourthly,considering the dynamic impact among the three major global liquidity destinations,inflation and asset bubbles display an evident inverse relationship within the global liquidity impact framework.This indicates that the real economy and financial markets are crucial for the spillover effects of global liquidity to China.Increased spillover effects on financial market asset bubbles lead to decreased effects on inflation in the real economy.However,this inverse relationship has notably weakened in recent years,emphasizing the need to monitor financial market health.Furthermore,there is no significant connection between the zombie enterprise situation in China’s credit market and the other two liquidity destinations.This may be due to the smaller scale of global liquidity entering China’s credit market compared to the other destinations,resulting in minimal impact on liquidity absorption between the credit market and the other destinations..Based on the above research conclusions,this article puts forward the following targeted policy suggestions: First,it is necessary to strengthen the coordination and linkage between fiscal policy and monetary policy,and respond calmly to external risks.Specifically,this requires an active fiscal policy to enhance efficiency,a more proactive monetary policy while maintaining stability,and improved coordination between fiscal and monetary policies to increase policy implementation accuracy.Second,it is important to deepen the supply-side structural reform of finance and promote the development of China’s financial market.This involves improving financial infrastructure,building a multi-level domestic financial market system,and continuing to deepen financial reform and opening up while seeking stability and progress.Third,it is necessary to improve the "micro-regulation & macro-prudential" management framework for cross-border capital flows.This includes introducing flexible macroprudential regulatory tools,developing response plans for extreme risk situations,and increasing the flexibility and timeliness of the cross-border capital flow regulatory framework based on actual financial market risk conditions. |
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