Interest rate determination theory is an important part of interest rate theory. If the interest rate is only the ratio of interest to principal to discuss the level of interest, then the problem of interest rate determination seems not complicated. In the early days of capitalist development, economists expounded this issue, and their focus was mainly on the source and nature of interests. However, in modern economy, the decision of interest rate is not only restricted by many economic and social factors, but also its changes will have a great impact on the whole economy. Therefore, when studying the decision of interest rate, modern economists pay special attention to the relationship between various variables and the balance of the whole economy. In fact, because of the complexity of interest rate and its importance in economic activities, interest rate determination theory has important theoretical and practical significance for the basic research of economics and finance.

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