Empirical Research On The Relation Between Interest Rate And Household Savings Deposits From The Prospect Of Financial Repression

With the development of economics, the absolute value of China household savings keeps on rising, while the savings rate steadily increases. Although the high amount of savings can provide enough capital for investment, it also will result in some problems. According to the Mckinnon-Show theory, there is a certain degree of financial repression in China, which result in that the nominal interest rate is under control,remains low and even the real interest rates is negative. However, financial repression didn’t stop the growing of the savings deposits. This article focuses on empirical research on the relation between interest rate and household savings deposits, and the conclusion is that the elasticity between interest rate and savings deposits is very low. Then analysis continues from the point of financial repression. And finally some relevant policy suggestions are proposed.