The Real Estate Impact On Inflation Expectation

Since 1998 chinese housing reform, the real estate market has been developing rapidly. the scale of the real estate market got continuous expandationg, real estate prices have increased steadily, the real estate industry has grown to an important industry in China. With the impact of house prices and stock prices and other asset prices, the general level of prices in China began to rise, To the second half of 2009 the house prices and prices index are still rise, at the same time,the capital market continuously expandding eventuallycause the real estate maket have the double Property of Physical assets and faniancial assets of Commodity. So, how to healthy development on the basis of reasonable real estate market in the stable consumer price level; how to use real estate prices which contain information to accuratly predict future inflation trends, then correctly and timely improving Monetary policy implementation through this modest prediction in advance, thereby achieving long-term financial stability and economic growth target? This question have a good theoretical and practical significance for Chinese scholars and governmentThis paper study real estate price impaction to Inflation expectations in theoretical and empirical on the basis of research at home and abroad, first introduced the theory of our real estate-related and state of real estate development.second, I introduced the theory of inflation expectations and the situation of inflation in China, then analyzed Relationship between the actual inflation expectations and inflation expectations. We also theoretically analyzed mechanismof real estate price volatility impactiong on the expected inflation, In the empirical test we use econometric analysis of correlation coefficients, stability test, VEC model cointegration, long and short term methods such as Granger causality to study our question through chinese data. From the empirical results we concluded that:the real estate prices and inflation expectations and inflation exist long term Cointegration relationship in the sample interval, Furthermore cointegration relationship is positive. Real estate prices with money supply, credit volume, and gross national product also have positive cointegration relationship. In addition we can see that real estate prices and interest rates were negative in the cointegration relationship. Granger test also shows that real estate prices and inflation exist long term two-way Granger causalityFinally, we put aforward policy to the People's Bank of China from the aspect of the establishment of the CPI index includes real estate prices, a reasonable guide public inflation expectations, improving real estate market system and money market interest rate system, a reasonable guide to the price and so on.