Study On Interest Rate Transmission Mechanism Of Monetary Policy Within The Framework Of Dual-track Interest Rates In China

According to the interest rate transmission mechanism of monetary policy, the domestic and foreign scholars have done a lot of research. Because of the current economic system in our country, our country also exist in interest rates of government regulation and market interest rate, which makes interest rate transmission mechanism of monetary policy of our country as not same as foreign monetary policy transmission mechanism of the existence of pure market interest rates, we need to make an independent research on the actual situation of our country. Based on above reasons, this paper studies interest rate transmission mechanism of monetary policy within the framework of dual-track interest rates in China.In this paper, the research mainly divided into two parts. The first part is the theory analysis, The mainly purpose is to elaborate the neutral monetary policy in this part, which is the premise of the empirical study. The second part is empirical research, in this part Using data from January 2003 to November 2014 to research on monetary policy by government to control interest rates is how to influence fixed assets investment, total social consumption and GDP with using cointegration test, Granger causality test, impulse response function and variance decomposition methods, and the monetary policy by the market to control interest rates is how to influence fixed assets investment, the influence of the total social consumption and GDP. Finally the monetary policy by government regulation rates compares as market interest rates, it is concluded that interest rate transmission mechanism of monetary policy is overall effective but not unobstructed in China.Overall, although interest rate transmission mechanism monetary policy interest rate transmission mechanism is not smooth in China, but interest rate transmission mechanism of monetary policy in our country still exists and effective in the long-term. The sensitivity of the market interest rates are higher than the sensitivity of government to control interest rate, it also provide the basis for reform of China’s market-oriented interest rate. To analyze from the aspects of the influence of the rate of investment in fixed assets, money supply shock effect on the interest rate market interest rates and government control in line with expectations, whether the government regulated interest rates or the impact of the market interest rate on investment are in line with expectations. According to the analysis of the social spending, interest rates influence the social spending though substitution effect on consumption and wealth effect at the same time, the current economic environment of high savings in our country, the interest rate the substitution effect is greater than the wealth effect on consumption, which lead to rising interest rates decreased social spending. From the analysis results of GDP, interest rate will produce larger volatility in impact of GDP effect.Finally, in order to solve the problems of transmission mechanism the monetary policy within the framework of dual-track interest rates in our country, and at the same time in order to improve the effectiveness of monetary policy in our country, these three Suggestions is to put forward to gradually promote the marketization of interest rates, to push residents interest rate sensitivity in the all-round,to deep the reform of state-owned enterprises, to improve financial services, to lubricate rate transmission channels Hope these Suggestions can provide the beneficial reference on the effectiveness of the interest rate transmission mechanism of monetary policy in China...