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Global Liquidity: A Selective Review

Author

Listed:
  • Benjamin H. Cohen

    (Monetary and Economic Department, Bank for International Settlements, 4051 Basel, Switzerland)

  • Dietrich Domanski

    (Monetary and Economic Department, Bank for International Settlements, 4051 Basel, Switzerland)

  • Ingo Fender

    (Monetary and Economic Department, Bank for International Settlements, 4051 Basel, Switzerland)

  • Hyun Song Shin

    (Monetary and Economic Department, Bank for International Settlements, 4051 Basel, Switzerland)

Abstract

Global liquidity is a catch-all term that is used to denote the combination of easier financing conditions, capital inflows, and exchange rate appreciation. An approach based on the activities of internationally active financial institutions sheds light on the conceptual underpinnings and the economic mechanisms involved in the transmission of global liquidity. The analysis highlights the role of international funding currencies, especially the US dollar. The analysis also motivates a set of global liquidity indicators based on the size and currency composition of balance sheets.

Suggested Citation

  • Benjamin H. Cohen & Dietrich Domanski & Ingo Fender & Hyun Song Shin, 2017. "Global Liquidity: A Selective Review," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 587-612, September.
    • Handle: RePEc:anr:reveco:v:9:y:2017:p:587-612
    DOI: 10.1146/annurev-economics-063016-104331
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    Citations

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    Cited by:

    1. Karsten Kohler, 2020. "Gross capital flows and the balance-of-payments: a balance sheet perspective," Working Papers PKWP2019, Post Keynesian Economics Society (PKES).
    2. Ivan, Miruna-Daniela & Banti, Chiara & Kellard, Neil, 2022. "Prime money market funds regulation, global liquidity, and the crude oil market," Journal of International Money and Finance, Elsevier, vol. 127(C).
    3. Pierre-Olivier Gourinchas & Hélène Rey & Maxime Sauzet, 2019. "The International Monetary and Financial System," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 859-893, August.
    4. Stijn Claessens & M Ayhan Kose, 2018. "Frontiers of macrofinancial linkages," BIS Papers, Bank for International Settlements, number 95.
    5. Stijn Claessens & M Ayhan Kose, 2017. "Asset prices and macroeconomic outcomes: a survey," BIS Working Papers 676, Bank for International Settlements.
    6. Israr Ahmad Shah Hashmi & Arshad Ali Bhatti, 2019. "On the monetary measures of global liquidity," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 5(1), pages 1-23, December.
    7. Bryan Hardy & Goetz von Peter, 2023. "Global liquidity: a new phase?," BIS Quarterly Review, Bank for International Settlements, December.
    8. Raphael Cunha & Andreas Kern, 2022. "Global banking and the spillovers from political shocks at the core of the world economy," The Review of International Organizations, Springer, vol. 17(4), pages 717-749, October.
    9. Sergio Florez-Orrego, 2021. "Money Matters: Global banks, safe assets and monetary autonomy," Documentos CEDE 19153, Universidad de los Andes, Facultad de Economía, CEDE.

    More about this item

    Keywords

    capital flows; international currencies; leverage; international finance;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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