Global liquidity has become a key focus of international policy debates, yet the term continues to be used in a variety of ways. This lack of precision can lead to potentially undesirable policy responses. In this feature, we attempt to clarify the concept of global liquidity, its measurement...

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...