Empirical Research on Deposit Interest Rate with AR Model

This paper introduces the establishment of an AR model on the impact of inflation,deposit savings,consumption to deposit interest rate.The author finds the following 4 phenomena through an empirical experiment: the big difference between the real interest rate and the nominal interest rate;that inflation is the most important determinant for the real interest rate;the abnormal relationship between deposit savings and real interest rate;and that consumption expansion makes interest rate increase.The article suggests that interest rate should be adjusted on time,interest rate market reform should be accelerated,and interest rate policy instruments should be applied to restrain the liquidity overload and inflation.