China's Monetary Policy On Real Estate Price Fluctuations

There are many factors that affect real estate price. In this paper, we try to analyze theinfluence of monetary policy on real estate price fluctuation from theoretical andempirical perspectives.Firstly, we have a literature review both at home and abroad, getting a generalunderstanding about the research development of relevant fields. Many researchesindicate that easy monetary policy usually have the effect of promoting real estatebubble. Conversely, real estate bubble may hinder the effectiveness of monetarypolicy.In the next five chapters, we make the theoretical analysis, which are about theinfluences of interest rate、exchange rate、deposit reserve ratio、bank credit and loan、money supply on real estate price fluctuation. In addition, we summarize the similarexperience in other countries. What’s more, combined with China’s specific data ofmonetary policy in the past decade, we try to make sure about the influences ofmonetary policy on real estate price fluctuation.At last, the positive analysis is made. We use time series data of HP, M2, LOAN, R,DR and ER to do some tests in the framework of VAR model. The results arebasically in support of the theoretical analysis above, and further up point that,quantity monetary tools have better effect in a short period, while the price type toolsmainly work in a longer time. However, the housing price fluctuation may also have aimpact on monetary policy after several time-lags.