A Study On The Transmission Mechanism Of Interest Rate Policy In China

The theory of the transmission mechanics of the interest rate studies how the changes of the interest rate result in the changes of other economic variables such as the consumption and the investment and realize the goal of the policy based on such changes. With the reform of the interest rate liberalization, the transmission mechanics of the interest rate becomes better, and the effects become more obvious. During the interest rate liberalization, the interest rate will replace the credit rationing, and will become the mainly transmission mechanics of the financial policy. So it is very important and very urgent for us to study the theory of the transmission mechanics of the interest rate.This paper studies the transmission patterns and transmission ways, and by building a model describing the changes of the actions of the bank corresponding to the changes of the rates this paper also analyzed the micromechanics of the transmission mechanics of the interest rate. Based on the econometrics methods, the paper made an empirical analysis for the process of the transmission mechanics of the interest rate from a macroeconomic perspective. And at the end of the paper, some suggestions were made in order to promote the efficiency of the rate policy.This paper made some creative explorations in the following studies:1.The previous related studies made little research in the theory of the micromechanics of the transmission mechanics of the interest rate, while the paper made a model to describe the micromechanics and based on the model analyzed the impact of the changes of the rates on the changes of the actions of the participators in the market, and discovered the nonlinear pattern of transmission, which is a good complement for the previous related studies.2.By the simulation analysis, the paper explored the interaction between the interest rate and the loan actions of the bank, discovered the law of the variation of the amount of the loan, which can be a good reference for the policy-making.3.The paper used the modern econometrics techniques such as VAR, ECM, the Granger causality test to make empirical analyses in the transmission patterns and ways of the interest rate, which described the theory in a comprehensive way and made active explorations.