Experimental Study On China'S Interest Rate Policy Output Effect

This paper applies regression analysis and Granger test to make an empirical analysis on China's interest rate policy output effect and its transmission effect. The conclusion is China's interest rate policy output effect does exist, but the effect is weak on the whole. Nominal interest rate output effect hardly exists, while there is evident negative correlation and causality between real interest rate and output. China's interest rate policy output effect is weak because the transmission pathway of interest rate and output is obstructed. It is mainly reflected as investment and consumption is not influenced sensitively by the change of interest rate, and the transmission effect of interest rate change is not so good. Comparatively, the transmission effect of the change of interest rate (especially real interest rate) is more evident.