Empirical Research on Relationship among Interest Rates,Fictitious Economy and Household Savings

The income effect and substitution-effect of the interest rates have changed via fictitious economy,under which:(1) wealth effect of the rise of interest rates via fictitious economy will lead to the increase of savings in short term and decrease of savings in long term;(2) substitution effect of the rise of interest rate via fictitious economy will lead to the decrease of savings in short term and increase of savings in long term.The empirical evidence of Chinese 2000-2007 year data shows: interest rates have negative effect on savings;wealth effect is greater than the substitution effect;the mechanism that interest rates affect residents' income and household saving via investment does not exist.