Global Money

Michael J. Howell
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Michael J. Howell: CrossBorder Capital Ltd.

Chapter Chapter 2 in Capital Wars, 2020, pp 17-44 from Springer

Abstract: Abstract Global Liquidity is a source of funding, defined by the flow of savings and credit and analysed through a flow of funds framework. It can be measured by adding together the money flowing through its three main conduits: (1) Central Bank provision; (2) private sector supply from traditional banks and shadow banks and (3) cross-border capital inflows. The major sources of Global Liquidity are the US, China and offshore pools, such as the Eurodollar markets. Policy-makers and academics put more emphasis on interest rates, i.e. the cost of capital, than balance sheet size and the quantity of liquidity, i.e. the capacity of capital. The cost of capital matters in an economy actively driven by capital spending, but in a World featuring huge debt refinancings, the capacity of capital and, hence, liquidity matter more.

Keywords: Global Liquidity; Central Banks; Funding liquidity; Market liquidity; Cross-border flows (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-39288-8_2

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DOI: 10.1007/978-3-030-39288-8_2

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