In my remarks this evening, I'd like to examine three concepts of liquidity that are of interest in economics and finance. The first I'll call macroeconomic liquidity, which has to do with "overall monetary conditions," including interest rates, credit conditions, and the growth of monetary and credit aggregates.
The second is market liquidity, which refers to how readily one can buy or sell a financial asset without causing a significant movement in its price. A third form of liquidity that I'll be touching on very briefly is balance sheet liquidity, which refers broadly to the cash-like assets on the balance sheet of a firm (or household).