A Risk Assessment Model Based On Attribute Theory

Abstract

Since the global financial crisis in 2008, the Chinese government has invested 4000 billion to maintain the economic growth. And the investment made the inflation became more seriously. However, the investment has led to high inflation rate. To fight inflation, it is important to understand the effects of changes in interest rates, which is itself a complicate issue. This article investigated the roles and the interrelationship of five main parties that involved in the issue using Attribute Theory method. These 5 main parts are Banks, Government, Enterprises, Domestic capital and International capital. Each of the 5 main parties was considered to consist of 5 attributes, including agriculture, construction, service, manufacturing and mining. In principle, these 5 main parties each directly play a role in the changes of interest rate, and, at the same time, affect each other. Here we used the Attribute Theory method to investigate how the five parties affect the interest rate and their impacts on each other. As a result, we built a mathematical model to provide guidance on determining the interest rates to properly deal with various economical issues.