2023-08-11
Study on the China’s real interest rate after including housing price factor into CPI
2023-08-11 • Shiting Ding, Qintian Pan, Yanming Zhang, Jingru Zhang, Qiong Yang, Luan Jingdong
The Chinese economy has undergone a long-term transition reform, but there is still a planned economy characteristic in the financial sector, which is financial repression. Due to the existence of financial repression, China’s actual interest rate level should be lower than the Consumer Price Index (CPI). However, based on official China’s interest rates and CPI, over half of the years China’s actual interest rate remained higher than CPI by our calculation from 1999 to 2022. This is inconsistent with the financia…