THE STUDY ON THE LIQUIDITY TRAP IN CHINA’S MONEY MARKET

Caroline Geetha; Soon Lin Fei

doi:10.51200/mjbe.vi.2566

THE STUDY ON THE LIQUIDITY TRAP IN CHINA’S MONEY MARKET

Authors

Caroline Geetha Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Jalan UMS, 88400, Kota Kinabalu, Sabah, Malaysia
Soon Lin Fei Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Jalan UMS, 88400, Kota Kinabalu, Sabah, Malaysia

DOI:

https://doi.org/10.51200/mjbe.vi.2566

Keywords:

liquidity trap , interest rate real, estate price , financial market

Abstract

This study aims to identify the liquidity trap and indicate the factors that affect money liquidity in China. A liquidity trap is an economical issue which is faced by lots of developed countries when their economy has achieved a certain stage of development, such as Japan, America and Europe. However, China as the fastest-growing developing country, some scholars suggested that its economy has also being trapped in a liquidity trap. Thus, to verify this opinion, monthly data of several important economic indexes were selected through a series of econometric process to indicate two major findings. First, the economy of China has not fallen into a liquidity trap. Besides, the interest rate and real estate price had a negative impact on the liquidity of money in China while the development of the financial industry had a positive contribution.

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6_MJBE Vol. 7 (October, 2020)

Published

31-12-2020

How to Cite

Geetha, C., & Soon Lin Fei. (2020). THE STUDY ON THE LIQUIDITY TRAP IN CHINA’S MONEY MARKET. Malaysian Journal of Business and Economics (MJBE), 7(1), 75. https://doi.org/10.51200/mjbe.vi.2566

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Vol. 7 No. 1 (2020): MJBE Vol. 7 (October, No. 1), 2020

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