A Comparative Study Of Marxist Interest Theory And Western Interest Theory

The marketization of interest rate is a must in the development of market economy, and is the trend of China's financial system reform. As an important macroeconomic variable, interest rate exerts a heavyweight regulation effect on the macro-economy of a country. Given that China is in the middle of interest rate marketization, unprecedented problems and challenges are quite likely to pop up, which calls for a complete theoretical framework to guide the actual practice during the marketization. Therefore, this thesis attempts to find out the theoretical and practical basis for China's interest rate marketization through a comparative study of Marxist interest theory and western interest theory.At first, this thesis sketches out the essentials of Marxist interest theory, including the causes of interest, the source and nature of interest, the factors deciding the variation of interest rate as well as the economic functions of interest rate. Then a brief illustration and analysis are presented on different schools of western interest theory across three main periods—early interest theory, modern interest theory and contemporary interest theory. Following that, a comparative study is conducted between Marxist interest theory and western interest theory, specifically in terms of class stand, research purpose, research perspective, research method, theoretical basis and research objects. The conclusion can drawn that the two theories are distinctly conflicting in terms of class stand, research purpose, research perspective, research method and theoretical basis, making them fundamentally contradictory systems. However, when it comes to concrete research objects, the two theories show discrepancies in the respects such as the source and nature of interest, the decision of interest rate, the functions of interest and interest rate as well as the policy effect of interest rate. Despite of all these differences, something in common is discovered, given an actual socio-economic condition, in the understanding as to the decision of market interest rate, functions of interest rate, structure of interest rate and interest rate policy. Finally, the theoretical significance of the two interest theories in the marketization of interest rate is elaborated, pointing out that Marxist interest theory carries a guiding implication in addressing the interest rate issues in China's socialist economic environment. While it has apparent limitations, western interest theory still provides us with some inspirations.Therefore, with a view to establishing a scientific and modernized interest theory that meets China's needs, a combination with the absorbable elements in western interest theory is advised based on actual practices. By constantly refreshing Marxist interest theory, a better theoretical guidance could be spun out to serve the reform of interest rate marketization.