| Interest rate transmission mechanism of monetary policy is a very important one of monetary policy transmission mechanism. It is a mechanism that reflects how the changes of monetary policy influence interest rates, and results in changes of investment and consumption and other economic variables, then leads to total output and changes in the price level. Since the1990s, during the trend of financial regulation continually relaxing and financial innovation accelerating, interest rate transmission channel has become the main channel of monetary policy transmission mechanism in the developed western countries once again.Since1996, China also followed the trend of the times, and began to carry out gradual interest rate liberalization. With the advance of this process, Since October29th,2004, People’s Bank of China no longer regulate the upper limit of the RMB lending rate of the financial institutions excluding the credit cooperatives in both urban and rural areas, which indicates that China has successfully achieved the periodic target of interest rate liberalization "regulating the lower limit of the lending rates and the upper limit of the deposit rates ". Since July20th,2013, the central bank fully liberalized the lending rates of financial institutions, which signified the accelerating of the pace of interest rate liberalization and the deepening of the level of interest rate liberalization. In the end of2013, Zhou Xiaochuan clearly said that the central bank should focus on establishing and perfecting the market interest rate system, and constantly improve the interest rate regulatory framework of the Central Bank, dredge and improve the interest rate transmission mechanism. With the steady advance of gradual interest rate liberalization, the effect of the interest rate transmission mechanism of monetary policy in China’s monetary policy transmission process will be increasingly important. The interest rate transmission mechanism of monetary policy has become an important topic of theoretical and policy-making sectors in China. Therefore, under back of the deepening of the interest rate liberalization, our study of whether the interest rate transmission mechanism of monetary policy is unblocked has important theoretical and practical significance.This paper is divided into five chapters. The first chapter is an introduction, it discusses the research background and significance of this paper, summarizes the current domestic and oversea’s research situations, introduces the research method and research contents, and notes the innovation points and the shortcomings of this paper. The second chapter is the theoretical analysis of the interest rate transmission mechanism of monetary policy in China. It introduces the gradual interest rate liberalization in our country firstly. Then briefly introduces the most classical Keynesian interest rate transmission theory of monetary policy. In the last, analyzes the interest rate transmission path in our country combining with our country’s specific national conditions. It divides the interest rate transmission mechanism of monetary policy into two stages including financial transmission and economic transmission and analyzes all steps of the interest rate transmission mechanism of monetary policy in China. The third chapter is the empirical analysis of the interest rate transmission mechanism of monetary policy. It uses the econometric models to quantitatively analyze the interest rate transmission mechanism from the financial transmission and economic transmission stages. The fourth chapter mainly analyzes the reasons that make the effect of the interest rates transmission mechanism of monetary policy not significant based on the results of the empirical research. The reasons mainly contain the degree of the interest rate liberalization, the reactive sensitivity of the commercial banks, enterprises and residents to the changes of interest rates and so on. The fifth chapter comes up with some policy recommendations to improve the effectiveness of the interest rate transmission mechanism of monetary policy accordingly.In this paper, I combine the theoretical analysis and empirical analysis. In the part of the empirical analysis, I use a segmented metering and comparative analysis. The whole process of the interest rate liberalization is divided into two time periods, and I investigate whether the progress of gradual interest rate liberalization improves the effectiveness of the interest rate transmission mechanism significantly in our country by comparing the results of the two time periods. Empirical results show that, with the advance of gradual interest rate liberalization, the interest rate transmission effects of monetary policy has increased, but has not been significantly improved. |
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