Interest Rates Linkage Effect Of China&U.S. And The Trend Research

Interest rates not only an economic system based on variables directlydetermine and influence other important economic variables such as output,inflation and exchange rates, but also an important tool of macroeconomicregulation and control for monetary authorities. Under the open economy,interest rates policy will affect eacher others through the internationaltransmission mechanism, so one country’s interest rates policy will focus onboth domestic and international econmic situation. The global financial crisistriggered by the U.S. subprime mortgage crisis had a huge negative impact onresponse to the financial crisis on the world economy, the world’s majoreconomies have lowered their interests rates after the United States first cuttheir benchmark interest rates, meanwhile, China’s monetary authorities haverepeatedly cut interest rates in2008,seemingly it’s consistent with the law ofinterest rates cut, in essence, the international interest rates transmissionmechanism was being at work. Therefore, from a realistic point view of theeconomic environment study, the linkage of interest rates between China&U.S. is an objective reality, we should be concerned about the linkage aboutits development situation, constantly monitoring its development trend, at thesame time, China’s interest rates policy should also consider the country’seconomic situation. In an open economy, sdudying the linkage effects ofChina&U.S. interest rates and its trends are of great theoretical and practicalsignificance, which should offer my personal opinion for the effectiveimplementation of the interest rates policy.Firstly, there were some relevant theoretical explanations of theinternational linkage of interest rates transmission mechanism, proving that aclear linkage between the interest rates is an objective reality. Before thelinkage effects of China&U.S. interest rates policy in the formal part werediscussed, the article first spent a certain length of China&U.S. interest ratespolicy giving a brief review to design to make us understand the linkagebetween China&U.S. interest rates experiencing from no to yes, from weakto strong development momentum. On this basis, last ten years interest ratesdata of China&U.S was used for its empirical analysis. After the study of ourcountry’s macro and micro economic environment, we found that control ofinterest rates facing multiple difficulties for the enhancement of China&USinterest rates linkage between higher operational skills. At last, based on thereality of the plight of in-depth analysis and rational thinking, we proposed tofollow the linkage of China&U.S. interest rates policy and a number of policyrecommendations to maintain the relative independence. Both throughtheoretical and empirical research, we draw some conclusion of the economicdevelopment situation for China, which was more consistent with theconclusions. This paper argues that: with the integration in the globaleconomy speeding up,U.S. interest rates policy had the increasing influenceof China on interest rates policy, China interest rates was to maintain a certain linkage, but also should maintain its relative independence as the domesticeconomic situation. So, on the one hand, we must continue to deepeneconomic reform-related, such as interest rates, exchange market; on theother hand, strengthen dialogue and cooperation mechanism with the U.S. inthe promotion of mutually beneficial and win-win, meanwhile, we must alsomake use of the interest rates linkage effect to strengthen our economy towithstand external negative interference.