As a“transmitter”of monetary policy, the reform of the Loan Prime Rate（LPR）system is of great significance for improving the efficiency of monetary policy transmission, reducing financing costs for enterprises, and increasing support for the real economy. According to the existing research, studies on LPR reform focuses on whether LPR reform effectively improves the transmission efficiency of monetary policy, with few literatures addressing the link between LPR reform and the real economy or employment. The“stable employment”policy has become the focus of national attention, the impact of LPR reform on the real economy and employment offers a new perspective for the study of LPR reform.
The aim of this paper is to study the impact of LPR reform on the real economy and employment through policy simulation. Based on national economic accounting data such as national input-output data and capital flow data in 2020, the paper constructs a 9-sector financial CGE（Computable General Equilibrium）model that includes the capital market, illustrating the financing channels among residents, non-financial enterprises, traditional financial institutions, government, and foreign sectors. The study simulates and evaluates the impact of LPR reform on Gross Domestic Product（GDP）, manufacturing output, currency liquidity, and employment levels across various manufacturing industries, examining the role of LPR reform in promoting the development of the real economy.
The results show that, firstly, in the context of LPR reform, a reduction in loan interest rates can promote GDP growth and manufacturing output while enhancing currency liquidity. Secondly, As LPR reform progresses, the labor levels in manufacturing and high-tech industries generally show a upward trend with the decrease in loan interest rates, with different manufacturing industries exhibiting varying sensitivities to the impact of LPR reform. Thirdly, LPR reform can help achieve the policy goals related to supporting the real economy and stabilizing employment.