Research On My Country's Interest Rate Transmission Effect Under The Conditions Of Deregulation

Interest rate transmission mechanism is one of the main monetary policy tools,whose degree of improvement directly affects the effectiveness of macroeconomic regulation.In the early stage of China's reform and opening up,fiscal policy was the dominating macroeconomic policy.Contrast to fiscal measures,monetary policy was applied relatively late and thus the development of interest rate mechanism is backward correspondingly.It is until the last decade of the twentieth century that the interest rate liberalization was activated and the interest rate transmission mechanism was employed to manipulate the economy,which diversified the monetary policy tools in the process of macro-economy control.Interest rate liberalization is more than a process of interest rate transmission mechanism improvement and thus the study of interest rate transmission mechanism is of great significance in the development of interest marketization and monetary policy.Since China has entered a New Normal,interest rate liberalization reforms has been continuously carried out and one of the typical achievements is the deregulation of lending rates in August 2013,indicating a new stage of China's interest rate liberalization.Subsequently,in October 2015,the liberalization of loan interest rate marks a complete marketization of interest rates in China.Consequently,this paper mainly concentrates on the effectiveness of the interest deregulation since the reform in October 2015,namely if the interest rate transmission mechanism is more effective.To begin with,this thesis combs the infrastructural theories of interest rate transmission mechanism and meanwhile illustrates its operational mode and transmission routes,being the basics for further analysis.After that,the emphasis moves to the interest rate transmission mechanism in china.Through the exploration of the interest rate liberalization history and the driving forces behind the evolution of interest rate policy and its function mechanism,this article has pointed out the primary routes of interest rate transmission mechanism and its problems and relevant causes.Meanwhile,factors of interest rate transmission mechanism and the interaction among interest rate,commodity market,capital market and labor market have been studied likewise.In the next moment,this paper,based on the data since October 2015 and the theoretical analysis of interest rate transmission mechanism we have discussed,has achieved a quantitative analysis of the effect of interest rate transmission.Ultimately,the problems and causes of interest rate transmission mechanism in China and also the corresponding policy recommendations have been proposed according to the empirical findings.