Research On The Financial Accelerator Effect Of The Real Estate Market Of China

Since the real estate industry was identified as the pillar industry of China in2003, its ability to promote economic growth has continued to be improved, and thelocal economy even shows dependence on it at some degree. The complicatedinternational and domestic economic situation makes the government’s financialpolicy does not achieve the desired effect at the real estate market. Influenced by theasymmetric information of market, changes of financial policy always cause severeshock of real estate market. Because of the pro-cyclicality of financial policy, the realestate market is easy to get into bubble in boom phase, slide into depression inrecession phase. And this is not consistent with the target of economic construction:develop stable. To avoid the real estate bubble and maintain the rapid growth ofeconomic output, it is necessary to conduct in-depth research on cyclical fluctuationof financial policy and real estate market.This article analyzes the financial accelerator effect of financial policy at the realestate market on the base of Bernanke’s financial accelerator theory. Firstly, weclassify the relevant research literatures, introduce the financial acceleratormechanism and transmission channels, and analyze the premise and transmissionchannel of financial accelerator at the real estate market. Next, we analyze thedevelopment of Chinese real estate market and change of financial policy, try to findfinancial accelerator effect performance on the real estate market. Then we establish aVAR model based on time series data, make empirical tests to prove the existence offinancial accelerator effects of real estate market of China. Later, we make regressionanalysis with panel data of listed real estate companies to test the asymmetry of thefinancial accelerator effect. The empirical results show that there is notable financialaccelerator effect of real estate market of China, and the financial accelerator effectshave obvious feature of asymmetry. Finally, we will give some suggestions withconsideration of the current development situation of China’s real estate market andthe main conclusions of this study.