The Real Estate Price Conduction Effect Of Monetary Policy Research In China

Since last two or three decades, stock, real estate and other asset markets have developed rapidly in many countries and regions. The increased sizes of the markets have a strengthened influence on national economy. The bubble burst of the stock and real estate markets in Japan in1980s, together with the financial tsunami caused by American real estate market in2008make the national currency authorities worldwide not only to concern on the traditional monetary policy transmission channels such as interest rate channel, credit channel and exchange rate channel, but also pay more attention to the influence that the transmission mechanism of monetary policy asset prices to the effect of the monetary policy transmission.Currently, due to these researches and debates which are following their different hypothesis and premises, and providing policy recommendations that are not identical and sometimes incorporate with totally different views from different space-time background in different countries, all of these result in so many surprising research achievements of this filed. Therefore, with current rapid development of the capital markets, it has a strong significance of times background to study the transmission mechanism of China’s currency policy asset prices and its conductive effect.Since the housing commercialization reform in1998, with the support of the related policies, real estate market in China has showing a rapid development momentum. Especially after2000, real estate investment grows at an annual average rate of25%and the real estate transactions grows at an average rate of27%, up from the357.2billion in2000to5911.9billion in2011. In many areas, the real estate industry has become the pillar industry of the local economic development. However, with the fast development of the real estate market, the housing prices soared simultaneously. This also brought negative influence on society. Although since2003, the central government has issued a series of tighter monetary policy, the housing prices still run in a high level. Even a modest loosening monetary policy will result in a rise in reprisal phenomenon, this makes the validity of monetary policy being questioned.Base on the above consideration, this paper takes our country’s monetary policy real estate price transmission effect as the research content, focus on analysis of how t he monetary policy affect the price of real estate, and how the real estate price affect t he investment,consumption etc, it has certain theoretical and practical significance. It not only can enrich monetary policy transmission effect theory of our country, but als o can provide some policy recommendations on national real estate market healthy de velopment and continuously stabilized economy growth.In order to achieve the effective discussion on the content of monetary policy real estate price transmission effect; this paper is divided into three parts. At the begin ning,It raises the question, introduce the background of the monetary policy real estat e price transmission effect and research significance as well as the status of Chinese a nd foreign research, consequently, Advance the research significance and the problem s need to be solved of this paper.Then analyzing the problem.Firstly, it analyzes the mechanism of our country mo netary policy real estate price transmission effect and construes the each link transmis sion effect. Mainly focus on the analysis of how the monetary policy affects the price of real estate, and how the real estate price affects the investment, consumption. Seco ndly, Base on the theoretical analysis, through constructing the model, Construe the e mpirical analysis of the monetary policy-real estate price transmission effect as well as compare and contrast the different conduction among east, central and west regions. Furthermore, through the comparison between empirical analysis results (including t he regional empirical analysis) and theoretical effect, further analysis the existing pro blems in the China’s monetary policy-real estate price transmission mechanism and th e formation causes.Lastly, according to the analysis results above, solve the problem and puts forwa rd some policy suggestions on the application and improve the China’s monetary polic y transmission mechanism.This paper contains eight chapters, main contents as follows:The first chapter is introduction; it mainly introduces the research background and significance, research situation at home and abroad, research methods and logic, and innovative points and shortages.The second chapter is the literature review, it mainly reviews related research literature, evaluates the basic theory transfer effect of monetary policy to asset prices and our country’s housing price transmission effect, summarizes and compares the existing literature theory, method and data, and sums up the characteristics. Furthermore, this paper clarifies the research points and problems based on these characteristics.The third chapter is the theoretical analysis of China’s monetary policy housing price mechanism from a theoretical perspective. The first part is the transmission of our country’s currency policy to housing prices. The second part is the influence of real estate prices on investment and consumption.The chapter four is the empirical analysis of China’s monetary policy housing prices mechanism, based on the latest sample data, it mainly utilizes time series analysis method, VAR model, VEC model, GRANGER model to analyze’our monetary policy transmission effect of house prices.The chapter five is the comparison of the regional effects caused by China’s monetary policy housing prices. From the perspective of regional areas, this chapter analyzes how this monetary policy of transmission mechanism conducted and how to find the regional differences.The chapter six is the restriction factor analysis of China’s monetary policy housing price mechanism. This chapter mainly analyzes the factors that restrict the transmission mechanism and provides the reasons of generating the impeded transmission.The chapter seven is the policy suggestions. Combined with theoretical and empirical analysis of the chapter three, four, five, six and seven, and China’s actual conditions to provide some suggestions to adopt and implement monetary policy, the real estate market regulation policy and its price transmission mechanism.The chapter eight is the summary of the full paper.