| The practice of interest rate regulation started in U.S. since the Great Depression in 1930s. One of the most important objectives that made the government to implement the policy of regulating the interest rate on low level was to reduce the cost of investment, to stimulate investment, and to accelerate economic growth. People often make such deduction through Keynes's interest rate theory. Both Keynesian interest rate theory and the controversies to which from the Monetary and Neo-classjcal schools are all with a view to smooth short-term economic fluctuation.For developed countries, the standpoint of the interest rate regulation policy is to stimulate economic growth. Whereas for developing countries, the interest rate policy has to be subjected to their ambitious strategies for economic and social development -lowering interest rate to reduce investment cost, accelerating the development of national economy, and other economic policies are all designed to serve the objective of economic growth.The early theories of economic development encouraged developing countries to implement industrialization policies with the character of import substitution. In order to implement such policies, the countries had to utilize interest rate regulation policy to accelerate capital accumulation. In fact, whether the government implements import substitution or export oriented industrialization policies, the low interest rate regulation and credit rationing policies are essential for two reasons. One is to call together financial resources for realizing the government's strategy, the other is to increase exports as well as to decrease imports. People usually think that the low interest rate regulation and credit rationing financial policy plays an very important role for the recovery in Japan after it was defeated in world war II, and it is also a key factor in creating Southeast Asia's miracle.However, the interest rate regulation policy started to get into a deep end since 1970s.In 1973, two U.S. economists, Ronald I. McKinnon and Edward Shaw, brought forwardfinancial restrain theory and financial deepening theory simultaneously andrespectively, which were designed to interpret the relation between financialdevelopment and economic growth in developing countries. They concluded thatdeveloping countries had to change the financial restrain situation and tryto deepen their financial development. Interest rate deregulation was thekeystone of McKinnon and Shaw' s discussion. In order to accelerate theireconomic growth, lots of countries cast aside interest rate regulationpolicies that they have adopted for a long term in the past and attempted toimplement interest rate deregulation reform. The reform processes in some ofthese countries carried out well. And the deregulation policy advanced thegrowth of the economy. Whereas other countries still dealt with economicinstability and social turbulence. After the financial crisis in SoutheastAsia, the East Asia mode that once has been considered broadly as apotheosisof successful gradual reform was to some extent antiquated. People startedto reexamine the practices of interest rate policy reform that had been carriedout in different countries, including East Asian countries.This paper aimed to review the theories and practices of interest rate regulation policy, to study the theories of interest rate deregulation, and to analyze and compare the practices of interest rate deregulation reform in different countries, including developed countries and developing countries. The author managed to get some experiences and/or lessons from the practices of these countries that could guide the interest rate deregulation reform in China.After making a comprehensive view on the practices of interest rate policy reform in East Asian and Latin American countries, we can conclude that the East Asian countries have commonness in the reform process, i.e., the government dominates the process of reform. The basic ch... |
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