Unlinear Relationship Between Interest Rate And Investment

摘要

Based on the summary of theoretical studies on relationship between interest rate and investment, and empirical researches related, we find that the discussions about their relationship establish on linear relationship, but there are different conclusions. This paper uses a nonlinear method named Smooth Transition Regression Model (LSTR) to analyze the relation between the interest rate and investment. Empirical analysis shows that, the impact of interest rate on investment is nonlinear. The way of operation on interest rate policy in our country remains to be optimized in future.