A Study On The Interactive Correlations Between The Monetary Policy And Real Estate Price In China

Large swings in asset prices and economic activity in the United States, Japan, and other countries over the past several years have brought new attention to the linkages between monetary policy and asset markets. Monetary policy has been cited as both a possible cause of asset price booms and a tool for defusing those booms before they can cause macroeconomic instability. Economists and policymakers have focused on how monetary policy might cause an asset price boom. They also have interesting about how monetary policy authorities should respond to asset price fluctuation. Real estates is an important asset, its dual nature of physical assets and virtual assets make it link with the macroeconomic more closely, its price fluctuations are often related to the national policy and people's livelihood, so the relationship between the monetary policy and asset prices have received considerable attentions. Although the development of China's real estates market is not long, its rapid rate of development made it quickly becoming a major force to promote national economy development, and the impact of the real estate price fluctuations on the macroeconomic is not inferior to the level of developed countries. Against such a background, on the basis of the relationship between monetary policy and asset prices, this dissertation focuses on the inherent relationship between China's real estate prices and monetary policy and tried to answer whether China's monetary policy should repond to real estate price fluctuations directly.To answer whether the monetary policy should repond to real estate price fluctuations directly,we must make clear the inherent relationship between monetary policy and the real estate prices. We can elaborate the relationships from the impact of the real estate price fluctuations on the monetary policy objectives and the monetary policy transmission and the impact of monetary policy on the real estate price.This dissertation begins by elaborating relevant theory of monetary policy and asset prices. With the development of economic structure and financial structure, the monetary policy originated and improved continuously. After years of evolution, the goals of China's monetary policy at present are mainly to stabilize prices and promote economic growth. The financial assets is playing an increasingly important role in the national economy with its different pricing method from the physical goods',and its price fluctuations have significant impact on the monetary policy goals, and thus aroused more and more attention of the monetary policy authorities. The special nature of real estate make its pricing method be both identical and different from the fianancial assets'so the real estates has its own unique impact on the macroeconomy.Then this dissertation analysised the influence mechanism of the real estate price on the monetary policy– inflation and output,and then make a depth analysis of the real estate price channel through which the monetary policy transmission and what role the real estate price played in the tansmission channel. On the basis of theory analysis, we established a structure VAR model (SVAR) for the corresponding empirical testing.The results indicate that the impact of real estate price on inflation is significant, and a large portion of the changes in inflation following a monetary policy shock works through changes in real estate prices, but the impact on the output is smaller and the changes in output following a monetary policy works through changes in real estate price is also smaller; the wealth effect of the real estate price is weak while the investment effect is a little strong; there is a lag effect of the impact of real estate price on consumption an investment, from this we can learn that the fluctuation of real estate price may contain important information about future monetary policy goals.The dissertation made a further theoretical and empirical analysis of the impact of monetary policy on real estate price, in the empirical analysis, the stock price is involved in the empirical models, the results show that the monetary policy adjustments on the real estate prices and stock price are both significant.Finally, referring to foreign theories and data, the dissertation analyses the relationship between monetary policy and asset prices in the context of optimal policy rules. It will offer some reference function to our policy-making. On the foundation of previous context, the dissertation proposed some policy advices.