Process Of Economic Development In The Interest Rate Market Research

The policy of interest rate has been widely adopted to realize the internal and international equilibrium, make sure the effective allocation of financial resources and promote the economic development of a nation. During the period of economic recovery and development, nearly all of countries adopted the policy of low-rate regulation in order to realize some economic plans or industrial goals. While from the beginning of 1980s, most of countries have been pushing the reform of rate marketization wholeheartedly. By the building and perfecting of the mechanism of socialist market economy and the deepening of market, rate marketization is becoming one of focuses in China. In the paper, the author makes relevant research on the problem of rate marketization in the economic development in accordance with the real condition of China. More attentions are paid to analyses of certainty, effectiveness, condition and path choice of rate marketization in the eight chapters of the research paper. Chapter I Market deepening and financial liberalization. After analyzing the relationship between market deepening and financial liberalization, the author concludes that financial liberalization is the necessity of market deepening. So as for China in the process of market deepening. financial liberalization including rate marketization will be the only choice in order to promote economy. Chapter II: From rate regulation to rate marketization. The author analyzes the different functions exerted b interest rate policy in the different period of economic development. Although the advantage of the policy of rate regulation outweighed its disadvantage in the initial period of economic development, the negative effects are becoming elevated. So the policy of rate marketization is the I? reasonable choice. Chapterlll: The choice of intermediate targets of monetary policy and rate marketization. According to relevant agreements of China抯 accession into WTO and the theory of intra-monetary supply. the effectiveness of monetary supply as the intermediate target of monetary policy will decrease. So that interest rate will replace the role of monetary supply. Therefore it抯 necessary to set up a high efficient and sensitive market rate system. ChapterlV: The empirical evidence of the function of rate marketization. On the basis of Fry test, Gelb test, Roubini & Sala-I-Mar-Ti.n test, as well as the test made by World Bank, the author analyzes the effect on the economic development by rate inarketization through stimulating saving and investment. ChapterV: The negative effect being brought about by rate marketization. Rate flying, rate risk and reverse choice following rate marketization will be the possible negative consequences. ChapterVl: Case analysis. Through analyzing the different processes of rate marketization in US. Japanese. South Korea. Indonesia and Chili, the author points out some lessons we should draw Chapter VII: Some thoughts about rate marketization in China. After analyzing the advantage and disadvantage conditions, the author gives his proposals about the rate marketization reform in China.