The Research On The Impact Of Continued Cutting Interest Rates On Consumption Of China's Urban Household

The impact of interest rate on consumption has been the focus of attention. What effect of interest rates on consumption when the interest rates change is an issue that is worth exploring. On the Condition of low interest rates, this problem becomes even more important. As the U.S. subprime mortgage crisis triggered by the deteriorating world economic situation, the world entered the era of low interest rates, China is no exception. The age of decline of interest rates will change with the economic cycle emerged, but the research of its effect on consumption is rare.The decline of interest rates will affect a country's investment, consumption and so on, thereby affecting the growth of the national economy. The impact of interest rates on consumption related to the effectiveness of monetary policy, indicating that a comprehensive and systematic study of the issue is imminent. However, domestic studies of the issue is still in its infancy.This paper uses the national level of interest rates and consumption as an object of study and a theoretical analysis and empirical analysis combined with qualitative analysis and quantitative analysis of a combination of research methods. This paper uses inductive method of theory to summarize and analysis the issue of declining interest rates that scholars research, On the one hand, visually presenting the impact of lower interest rates on consumption-based theory to the reader;on the other hand, Preparing for the in-depth theoretical discussed below.On this basis, concrete analysising the impact of the interest rate on consumption, savings, investment, monetary policy, financial risks. Focusing on the analysis of the impact of lowering interest rates on consumption. Then qualitatively examining the impact of lowering interest rates on household consumption in China. Using Johansen cointegration test, this study investigated the factors affecting consumption and its correlation between the long-term, and focus on the impact of lowering interest rates on consumption. The empirical test results indicate:Under the lowering interest rate conditions, the factor of lowering the interest rate is versely proportional to the consumption level of urban residents. The continud decline of interest rate will promote the growth of the consumption level of urban residents, but the effect is very small. The reasons of this are:The upgrading of the consumption structure of urban residents is slow; the credit system is imperfect; the expected expenditure of urban residents is too High; the financing channels is non-smooth.Finally, according to the preceding analysis, suggestes some policy recommendations for promoting China's consumption under the condition of the continued lowering of interest rates in the current economic condition:upgrading the consumption structure of urban residents; improving the consumers'credit systems; trying to reduce the expected expenditure of urban residents; improving the financing channels.