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The Dynamic Relationship among Bank Credit, House Prices and Carbon Dioxide Emissions in China

Author

Listed:
  • Guangyang Chen

    (Business School, Nanjing Xiaozhuang University, Nanjing 211171, China)

  • Kai Dong

    (Business School, Nanjing Xiaozhuang University, Nanjing 211171, China)

  • Shaonan Wang

    (Department of Agriculture and Applied Economics, University of Georgia, Conner Hall, 147 Cedar St., Athens, GA 30602, USA)

  • Xiuli Du

    (School of Finance, Nanjing University of Finance and Economics, Nanjing 210023, China)

  • Ronghua Zhou

    (School of Social Sciences and Humanities, University College Sedaya International, Cheras 56000, Malaysia)

  • Zhongwei Yang

    (Business School, Nanjing Xiaozhuang University, Nanjing 211171, China)

Abstract

This paper explores the dynamic relationship among bank credit, house prices and carbon dioxide emissions in China by systematically analyzing related data from January 2000 to December 2019 with the help of the time-varying parameter vector autoregression with stochastic volatility (TVP-SV-VAR) model and the Bayesian DCC-GARCH model. Empirical results show the expansion of bank credit significantly drives up house prices and increases carbon dioxide emissions in mosttimes. The rise in house prices inhibits the expansion of bank credit but increases carbon dioxide emissions and aggravates environment pollution, and that the increase in carbon dioxide is helpful to stimulate bank credit expansion and house price rise. In addition, bank credit and house prices are most relevant, followed by bank credit and carbon dioxide emissions, then by house prices and carbon dioxide emissions. Therefore, we believe that in order to stabilize skyrocketing house prices, restrain carbon dioxide emissions, and secure a stable and healthy macro-economy, the government should strengthen management of bank credit, and effectively control its total volume.

Suggested Citation

  • Guangyang Chen & Kai Dong & Shaonan Wang & Xiuli Du & Ronghua Zhou & Zhongwei Yang, 2022. "The Dynamic Relationship among Bank Credit, House Prices and Carbon Dioxide Emissions in China," IJERPH, MDPI, vol. 19(16), pages 1-18, August.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:16:p:10428-:d:894208
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