Research On The Prices Of Real Estate And Inflation Expectation

With the development of countries in the world, the financial market is growing huge and fast Since 1970s. More and more investors and institutions began to invest in the real estate, so the real estate became to another hot focus in the portfolio investments after securities. The real estate is always known as the most genuine wealth, but now it has two totally different characteristics, which are physical and financial virtual. This Thesis focuses on the relationship between the price fluctuation of the real restate and the inflation expectation.With the study methodology of combining the microanalysis and macro analysis jointly the thesis analyzed the fluctuations in the real estate market. On the one side, it conducted researches on the reverse transfer of houses' prices and the hedging functions of the real estates. On the other side, it studied the impacts on the investors, the consumers and the financial institutions of the price fluctuations. Then we got the theoretical basic of the close relationship between the housing price and the inflation rates.It aimed to basically answer the question whether the housing price can be used as indexes to forecasting the changes of the inflation rates. The author carried on the Johansen cointegration tests and the Granger causality tests in the empirical analysis. The research showed that there is causal relationship between them and the price of real estates can be used as one fact to constitute the FCI to forecast the changes in the future inflation rates.Finally, based on the research results the thesis came to the conclusion that central bank should extract helpful information about market inflation expectation from the fluctuation of real estate price actively, formulate relevant monetary rule and level off the market inflation expectation in order to promote the stability of macroeconomics and finance.