Relation Between Market-oriented Of Interest Rate And Economic Growth

This article comes mainly from the perspective McKinnon(1973) and Xiao (Shaw)(1973) of "financial deepening" and "financial restraint" on the market-oriented of interest rates in the theory of economic growth in developing countries the impact of the view,and draw Other scholars on this issue analysis,then in theory have a result that market-oriented of interest rates affect economic growth and the way the mechanism,then do the empirical research combined with the actual situation.In this paper,the theory is that the market-oriented of interest rates in developing countries,will lead to long-term real interest rates are suppressed from a very low level or even negative to a positive level,and such changes will increase capital-output ratio,the savings ratio,the ratio of savings into investment,thereby affecting economic growth.This article first reviewed the domestic and foreign scholars on the theory of economic growth in the number of research results and focus of McKinnon(1973) andXiao(Shaw)(1973) of "financial deepening" and "financial restraint" theory,and secondly,in Combined with other scholars on this issue on the basis of the analysis,put forward the liberalization of interest rates affect economic growth and the way the mechanism,once again,using co-integration testing,causality test of China's liberalization of interest rates since the actual situation was analyzed,and may Related to the conclusion that in China mainly through raising interest rates to the rate for non-state-owned enterprises and improve the capital-output ratio to achieve,through the end of the empirical results from the analysis,China's inflation rate should be stable under the prerequisite of implementing interest rate Liberalization,making the real interest rate can be increased, should further improve the financial markets and increase investment channels,and to phase out preferential policies for loans of state-owned enterprises to the economic and other types of enterprises common competition limited funds,so as to enhance their production Efficiency.