The Study Of The Relationship Between Chinese Excessive Liquidity And Asset Price

Recently, the problem of excessive liquidity is becoming a prominent issue in Chinese economic. The manifestations of the problem of excess liquidity contain following points——the increase of the currency supply, the great amount of the deposit in the bank system, the difficultants of controlling the behavior of excessive lending of financial instruments, and the expanding scale of loan. Those features make the assets price increasing sharply, even cause bubbles. The key point of this dissertation is to research on the relationship between Chinese excess liquidity and assets price then present countermeasures on the management of excess liquidity and asset price bubbles.Section 1 is introductory part. Topical background and significance, method and approach will be briefly introduced.Section 2 is literature summarize part. First, two basic definitions mentioned in this paper, excess liquidity and asset price bubbles, will be explained. Second, systemic retrospection will be well done on the side of relationship between excess liquidity and assets price. Then the Japanese economics will be introduced as a typical case on asset price bubbles caused by excess liquidity.Section 3 is to analyze the present situation of the excess liquidity and assets price of China. We will get the conclusion that China is in the presence of great excess liquidity and asset price bubbles to some extant.Section 4 is to study the relationship between excess liquidity and asset price bubbles of China beginning with the introduction of the model on asset price bubbles based on the expanding credit. Then there will be demonstration research on the relationship from theoretical and empirical aspects.Section 5 is the suggestion part. According to the analysis of the solutions taken by the Central Bank, the suggestion on that how to solve the excess liquidity will be brought out.