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Effect Analysis of Real Estate Price and Monetary Policy: An Empirical Study Based on China Macroeconomic Data

Author

Listed:
  • Liang Su
  • Li Lin
  • Shaozhen Chen
  • Lin Li

Abstract

Since the reform of the housing system in 1998, China's real estate market has been gradually marketized. A large number of demand-side purchases that were suppressed by the planned economy were released. The rapidly rising real estate prices affected the People's Bank of China's monetary policy through Tobin's Q and the financial accelerator. This paper establishes a VAR model to analyze the policy factors and find out ¡°land finance¡± has promoted the rise of real estate prices to a certain extent and the regulation of the real estate market lags behind; real estate prices can interfere with the effect of monetary policy which rising real estate prices increase the uncertainty of monetary policy. Finally, this paper puts forward policy suggestions of the monetary policy and local fiscal revenue.

Suggested Citation

  • Liang Su & Li Lin & Shaozhen Chen & Lin Li, 2018. "Effect Analysis of Real Estate Price and Monetary Policy: An Empirical Study Based on China Macroeconomic Data," Applied Economics and Finance, Redfame publishing, vol. 5(2), pages 158-167, March.
    • Handle: RePEc:rfa:aefjnl:v:5:y:2018:i:2:p:158-167
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    References listed on IDEAS

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    Cited by:

    1. Ramzi Tarazi & Mohammad Zahid Hasan, 2019. "The Effect of Economic and Fundamental Factors on the Australian Property Performance," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 15(2), pages 155-184.
    2. Yufei Cao, 2021. "Measuring systemic risk and dependence structure between real estates and banking sectors in China using a CoVaR‐copula method," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5930-5947, October.

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    More about this item

    Keywords

    monetary policy; real estate price; VAR; land finance;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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