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

As the pillar industry in national economy, the sustained and healthy development of real estate plays a very important role in stable and rapid growth of whole national economy. It is also significant for improvement of people's living conditions. However, at present there are many hidden dangers under real estate's prosperous surface. The society and Central Bank have attached great importance to the numerous problems in real estate industry. The Central Bank has carried out various monetary policies to control real estate market and restrain the rise of housing prices.Real estate is a very typical capital-intensive industry, so monetary policy certainly has profound and lasting effect on real estate industry. In current China, how does monetary policy transmit on real estate market? What correlation exists among the loan scale, the interest rate, the money supply and real estate market? Which one generates the most effective influence on real estate market?In order to answer these questions, firstly, we introduce five main monetary policy transmission channels and six common monetary policy intermediate targets in detail. Secondly, we respectively describe the relations between real estate market and monetary policy transmission effect as well as between VAR models and monetary policy transmission effect. Thirdly, we conduct an empirical study on monetary policy transmission effect on China real estate market, and respectively establish VAR models and VEC models of the scale and the price of real estate market. There are several empirical results as follows. Firstly, there are no monetary policy intermediate targets which have long-term and short-term effect on the scale and the price of real estate market. Secondly, the loan scale has bigger intensity, faster speed and longer duration; the interest rate has smaller intensity, slower speed and shorter duration; the money supply has bigger intensity, slower speed and longer duration. Finally we propose several policy recommendations according to the empirical results.