A Research On Regional Difference In The Effect Of Chinese Interest Policy

A research on the existence and cause of regional differences in the effectiveness of interest rate policy will greatly help not only the interest rate lever to play a more effective role in the economy's regulatory but also the regional economic development to be more coordinated.This paper uses the VAR model and the research methods of impulse response function and variance decomposition to test the existence of regional differences in the effectiveness of China's interest rate policy empirically. Whether the response and the cumulative response of output to interest rate shocks in the impulse response function, or the contribution of interest rate to output in the variance decomposition, have come to the same conclusion that there are very notable regional differences in the effectiveness of China's interest rate policy, and the impact of the interest rate policy on the eastern part is significantly stronger than that on the western, central and northeast are something in between.This paper analyses the causes of regional differences in the effectiveness of China's interest rate policy from the point of view of micro entities in the conduction of the interest rate policy, including the industrial structure and enterprise structure which represent economic entities and the banking structure which is on behalf of financial intermediaries, and then relevant policy recommendations will be given on this basis.