Economics focus: A fluid concept

摘要

Liquidity is everywhere. Depending on what you read, you may learn that the world's financial markets are awash with it, that there is a glut of it or even that there is a wall of it. But what exactly is it? Again depending on what you read, you may be told that "it is one of the most mentioned, but least understood, concepts in the financial market debate today" or that "there is rarely much clarity about what 'buoyant liquidity' actually means." An economics textbook may bring you clarity-or confusion. It is likely to define liquidity as the ease with which assets can be converted into money. Fine: but that is scarcely the stuff of dramatic metaphors. Liquidity thus defined is surely to be welcomed; floods, gluts and walls of water surely not.