Research on the Relations Between Interest Rate and Stock Market in 2007

The central bank increased the interest rate continuously in 2007.Under this condition, the dissertation discussed the changes of the Chinese stock market through an empirical analysis.Based on commonly used economic rules, the increasing of interest rate and the deposit reserving rate may have bad effect on the stock market, but the Chinese stock market has not fallen down as anticipatd after so many monetary Policy.This text analysed this phenomena and found out why the rule doesn't work in Chinese stock market, then provided a suggestion to modify the rule.