An Empirical Analysis Of Influencing Factors Of China's Interest Rate

With the development of the construction of the market economy, the highly focus restriction of the interest rates cannot assort with the frequently changing of the price and other economics variables of the market. The innovation of the systems of interest rates is imperative under the situation. Today the innovation of the systems of interest rates that determined by market is felt about which needs much quantitative research. Recently there is much quantitative research how interest rates influence other macro economics index, but there is little research how other macro economics index influence interest rates.On the basis of the analysis on the theory, this article chooses some variables that may influence interest rates. The result of the tests of unit roots shows that in the period of the January of 2002 through December of 2005, the macro economics data of our country are non-stable. All the time series which are chosen are non-stable series which have one unit root. Through the tests of Granger cause and effect relationship, this article finds the Granger factors that influence interest rates. Using the theory of cointegration, this article constructs the model that influences interest rate. From the long-term equilibrium equation, we can see the factors that influence interest rates are industry product (IP), consumer price index (CPI), exchange rate(ER), price index of stock(CIS), savings of residents, money supplyM1, etc, on the basis of which, the article suggests some advices.