The Response Of Real Estate Price To The Intermediate Target Of Monetary Policy Based On Money Supply And Interest Rate

Because of the U.S subprime mortgage crisis, the word’s economy once wandered the brink of the collapse. The influence of the financial crisis is not fully disappeared. Trace the source of the crisis, we find that the real estate is an important factor. Because the real estate has the characteristic which is the second financial, monetary policy has an important impact on the real estate.In order to control the overheating of the real estate, the State council began to make a range of policies, such as make guiding document of the regulation, raise interest rates and improve the deposit reserve rate. However, due to the special circumstances of China, the real estate industry also has its own unique characteristic. Whether these measures have been taken on the regulation of the real estate market effective? Dose the regulation of the monetary policy have the reaction on the price of the China’s real estate? This paper selects the full ten years’quarterly data which is from January2001to December2010to make empirical research in order to answer these questions.The main object of this paper is the real estate prices and the content of the study is a long-term response between the price and the intermediate target of monetary policy which includes the money supply and the interest rates.The paper is divided into five parts. The first chapter explained the background and pointed out the research ideas、research tools and the methods. The second part is literature review section. The third introduces the concepts and features of the real estate and the monetary policy. The forth part is to make empirical analysis. And the last part which is the end portion of the paper is to summarize the paper, make the conclusion and point out the inadequacies of this study.The empirical results show that the real estate prices have a positive response, but it does not have a long-term relationship between the interest rates. This situation may be due to the China’s interest rate market limited and the imperfections of the housing market system.