Research On The Transmission Mechanism Of Real Estate Price To Inflation In China

To realize the price stability is one of the main goals of macro-control.Nowadays, China is facing the problem of constant price increase. We know that highinflation could not only destroy the economic development, but also influence thesocial stability. Meanwhile, the real state market has witnessed a lot of developmentsince1998in China, when it progressively becomes market-orient. But after years ofdevelopment of housing market, problems occur, and the risk of Bubble Real Stategrows, which will definitely affect the whole financial system and social economics.Therefore, to control housing price and inflation, these become the focus ofmacro-control in China, which can be seen from a lot of macro-control policies.Based on a massive1iterature research, the paper chooses studying on thetransmission mechanism of housing prices affecting inflation, instead of theircorrelation, because to straighten out their transmission mechanism has moreacademic and realistic meanings, not only to fill the blank of the relative academicresearch results, but also to offer more help to the policy makers. The structure of thepaper is as follows. Firstly, through theoretical analysis, this paper introduces theinflation theory and housing price theory．Secondly，to study further，it finds out thepathway of the interaction of the two, that is, their transmission mechanism, as well asbuilding the pathway models, and speculates the relationship of their two by using thegeneral method of statistical analysis. Finally，according to the data analysis andmetro economic model, we get the relationship of the inflation and housing price, andby using the conclusions of theoretical and empirical analysis，give the relating policysuggestions to prevent the asset bubble and inflation at the end of this paper.