| China has reformed its housing allocation system since1998, and the real estate industry has developed rapidly in these years. However, in this raid development, some of the problems are gradually emerging, such as investment in real estate industry grows too fast, housing prices soar, structure of supply and demand is irrational and banks credit support excessively. Thus Chinese government has adopted a series of measures to regulate the real estate investment and prices, but the measures are not very effective. Because the development of the real estate industry has a clear regional characteristics, the implementation of monetary policy effects in different regions are also not the same.The contents of this paper are organized as follows:Chapter One is the introduction. This chapter points out that the conduction effect of monetary policy on estate prices in Henan Province is the object of this paper. Then there is a brief description of the research background, the meaning of study, the structural arrangements, the methodology and some innovations.Chapter Two is the literature review and it divides into two parts. The first part is review of the impact of monetary policy on real estate prices and the second one is the impact of real estate prices on the real economy.Chapter Three gives the current situation of the real estate market in Henan. Firstly, the growth rate of investment in real estate development is high; secondly, the price of the real estate keeps rising and be at a high level; thirdly, the development of the real estate market is supported by the bank credit.Chapter Four is the theoretical basis of conductive mechanism of monetary policy to real estate prices and this mechanism can be divided into two stages. The first state is the impact of monetary policy on real estate prices. Monetary policy exerts an influence on real estate price through interest rate effect, credit effect and portfolio effect. The second state is the impact of real estate policy on the real economy. Here, real estate price has an effect on consumer spending through wealth effect, household balance sheet effect and crowding out effect, and has effect on investment through direct investment effect, Tobin’s Q effect and corporate and banking balance sheet effect. It also has an effect on imports and exports through effect of international capital flows, demand-driven effect and inflationary effect.Chapter Five is the empirical study of the conductive mechanism of China’s monetary policy to real estate prices in Henan Province. China has reformed its housing system since the late1990s. Then the real estate industry developed rapidly and plays a more and more important role in the national economy. Taking into account availability of data, this paper selects the first quarter of2003to the fourth quarter of2011to study. In the empirical process, this paper uses ADF unit root test, Johansen co-integration relationship test, vector error correction model and Granger causality test. And the empirical estimation also divides into two stages. In the first stage, I choose one-year real interest rates, the M2money supply and real estate prices in Henan Province as independent variables to study the impact of monetary policy on real estate prices. In the second stage, I select the total sales of consumer goods as well as the fixed asset investment as variable of consumer spending and investment spending respectively to analyze the impact of real estate prices in Henan Province on the real economy.Chapter six is conclusion and suggestion of this paper. After the empirical study, the conclusions are as follows. In the long term, money supply and real estate prices in Henan have a significantly positive correlation, and interest rates also have positive impact on real estate prices but not significant. In the short term, money supply has positive effect while interest rates have negative effect and both of impacts are not significant. That is to say that in the sample period, money supply has a quite significant impact on real estate price, but the relationship between real estate price and interest rates is weaker. The rise in real estate prices brings increase in investment spending both in the long term and in the short term. However, the impact of consumer spending is negative, indicating that the pathway of Henan real estate prices on the real economy has some obstacles.The distinguishing feature of this paper compared with previous literatures is as follows:the study on the transmission mechanism of monetary policy on the real estate have focused on the whole country, but lack analysis on various regions, so this paper centers on the transmission mechanism in Henan Province to make up for the blank in the study. |
PDF Full Text Request