The Monetary Policy Transmission Mechanism Of China Real Estate Market Based On VAR

Monetary policy is an important instrument in macroeconomic control. Since the year 1998 of housing monetary reform, China real estate market flourished because of the great consumer demand expanding. As the leading industry in economy, real estate play very important role in national fiscal income and the development of economy as well as the daily life of people. While in China, how the monetary policy transmission mechanism perform, and the loan, the monetary supply or the rate which one generate the most effective influence on the real estate market.Aime to answer such question, this paper organized the structure as follows. First, do a preliminary sum up in the field of the monetary policy transmission in real estate, from three aspect, theory of monetary policy transmission, key method of monetary policy transmission research (Vector Autoregression) and policy evaluation and study from different country researchers. Second, we select appropriate variables according to the monetary policy transmission mechanism, monetary indicator and the mutual correlationship between the monetary policy and real estate market. We choose corresponding data represented the loan, money supply and interest rate as monetary indicator. And we collect commercial house sales amount and Zhongfang housing sales price index of Shanghai as the represented variables in China real estate market. At the same time, we use fiscal cost as the indicator of fiscal policy in order to study the influence of coexisting monetary policy and fiscal policy on economy.Through the establishment of VAR and VECM model and the analyzing of Granger causality relationship both long time and short time, the stability of model, impulse response function and etc. We conclude that there is not any monetary indicator that has significant influence both in long term and short term; if we choose interest rate as the monetary indicator, we will have long term influence but long lag time as well; but if we select loan as the monetary indicator the performance will at verse, the short time influence while the short lag interval.