The Research Of Influence The Fluctuation Of China Real Estate Price Has On Inflation

Inflation is always the focus of china’s monetary policy concerns and plays aimportant role for the economic and policy stability. Since1998，China began tostop house distribution and started solved house problem by markets. Then houseprice is surging. In this regard, we would like to understand whether house pricework? how house price work? how much for the role? during the Inflation andeconomic overheating time.This article first theoretical analysis the transmission mechanism of the real estateprice fluctuation on inflation. Start with the view of aggregate demand，the effect ofthe real estate price fluctuation to consumption, investment, government purchase.And the from the view of aggregate supply, the effect of the real estate pricefluctuation to labor factor price and rental factor price.From the view of empirical, the use of date from January2001to December2010empirical the relationship between real estate prices and inflation. The establishmentof vector autoregressive model, real estate prices,interest rates, output,moneysupply and inflation rate of more than one variable into the model to analyze thedynamic relationship between real estate price volatility and the level of inflationunder the influence of a variety of factors.Granger causality test show that thevolatility of real estate is a one-way causal relationship of the level of inflation; unitroot tests and cointegration tests show that real estate prices and inflation stablecointegration relationship;impulse response function analysis showed that real estateprices by positive external shocks on inflation have a positive response;variancedecomposition results show that real estate prices in the13months to become thelargest contribution to the rate of inflation factors.Finally,based on theoretical analysis and empirical results,combined with China’sspecific circumstances,to make some policy recommendations on how to preventthe real estate bubble and inflation.