| The stock market is an important part of the financial system in our country. It has made a significant contribution to China's economic promotion. However, when the stock market is in drastic fluctuation, there will be a lot of speculation. It can cause price bubble or irrational decline in assets, affecting the market function. According to our country's macroeconomic situation, there are many factors that affect the volatility of stock market in China at present. And the impact of the mechanism is not the same. The world financial market's mobility is very different in different stages of development.And existing studies show that liquidity changes can have important influence on parts of the financial system. It can be seen that as an important part of the financial system, there are many links between the stock market and the overall level of liquidity in the financial system.This paper will combine the economics theory, explore several issues on the impact of money liquidity on the stock market, such as: Whether monetary liquidity will have impact on the stock market, how monetary liquidity will affect stock prices, how the effect of monetary liquidity on the stock market. At first, Combined with relevant economic theory, put forward the empirical hypotheses. And use VAR model, research the effect of currency liquidity on stock price. The results shows that monetary liquidity will affect stock price through multiple channels, such as: inflation, interest rates and asset. At the same time, for different types of companies, the effect to small and medium enterprises is greater. |
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