The Comparative Analysis On Interest Rate Policy And Policy Effect Between America And China

Interest rate is the time value and the price of capital which is a special production element, whose adjustments play an important role in the microeconomy and macroeconomy. Especially the outbreak of the international financial crisis in 2007, making the global economy fall into a recession, the various countries implemented monetary and fiscal policy to adjust economy. Therefor, interest rate as a monetary policy tool is used by these countries and fluctuated frequently.As the global ecnomic "Locomotive", the United States is always attracting the most attention, the Federal Reserve's adjustment on the federal fund rate affects both American and the world's other economic entities. Interest rate policy plays an significant role in the history of American monetary policy, and the Fed is good at employing interest rate-one of its tools. Generally speaking, the use of the federal fund rate is successful, especially in the Greenspan era, affecting the economy greatly. Therefor, it is essential to do the comparative reserch of interest rate policy and its effect between the U.S. and China. Through the analysis of the use of interest rate by the Fed, we can find the general experience which is significant to establish the indirect interest rate adjustment system in China. In recent years, the central bank of China began to adjust interest rate frequently with narrow fluctuation, and for the reform of the interest rates liberalization has made a dent, more and more scholors view interest rate as the intermediate target of monetary policy and an important variable to influnce the whole economy.Combined with qualitative and quantitative analysis, theoretical and empirical study, this article presents the practice of interest rate and its macroscopic policy effect between America and China, and at last puts forward relevant policy proposal for the interest rate policy in China. The whole article is divided into six chapters, and followings are concrete content.The first part demonstrates the selected topic background and significance, the current reserch at home and abroad in this area, and the points out the innovations and shortcomings of the article. The second parts describes the transformation and background of American interst rate policy from 1913 to 2008 when the federal fund rate drop to the level of zero. The third part outlines the fluctuation period of interest rate in China, from 1984 when the Peple's Bank of China was established to 2010. The fourth part compares the macroscopic effect of interest rate policy between America and China, and draws the conclusion that American interest rate policy's effcet on its macroeconomy is more significant than that on Chinese macroeconomy. And then in the fifth part,analyse the reason why there exists diffrence between the two countries'effect on economy of interest rate policy. Finally, the last part puts forward relevant policy proposal to improve the effeciency of interest rate policy.