The phrase "liquidity effect" was introduced by Milton Friedman (1969) to describe the first of three effects on interest rates caused by an exogenous change in the money supply. The lack of empirical support for the liquidity effect using monthly and quarterly monetary and reserve aggregates data led Hamilton (1997) to suggest that more convincing evidence of the liquidity effect could be obtained with daily data—the daily liquidity effect.
No takes yet. Share an insight, caveat, or question.
Daniel L. Thornton (2010) studied this question.
Synapse has enriched one closely related paper. Consider it for comparative context: