-Fisher Effect- Theory and -Fisher Paradox- in China’s EconomyReport as inadecuate




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-Fisher Effect- is the famous theoretical assumption about the interest rate and inflation rate. The paper first elaborates the basic principle of -Fisher Effect- theory, then finds the -Fisher Paradox- that may exist in China’s economy from the domestic and foreign scholars’ empirical study. Moreover, based on the data of China in 1980-2012, we conduct the Granger Causality Test of -Fisher Effect- and preliminarily conclude that from the empirical perspective, China does not exist long- term stable relationship between interest rate and inflation rate. Finally, it explains China’s -Fisher Paradox- root in the controlling characteristics of interest rate from policy perspective.

KEYWORDS

Fisher Effect, Fisher Paradox, Granger Causality Test, Interest-Rate Market

Cite this paper

Chen, C. 2015 -Fisher Effect- Theory and -Fisher Paradox- in China’s Economy. Open Journal of Social Sciences, 3, 80-85. doi: 10.4236-jss.2015.310012.





Author: Chaofan Chen*

Source: http://www.scirp.org/



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