The Impact Analysis Of The Real Estate Price Fluctuation Impacting On Currency Inflation

In the past forty years, under the world economy of low inflation, asset price fluctuations have occurred many times. Especially the systematic financial crisis and global economic recession asset caused by price bubble make the banks facing huge pressure of credit default, which may cause tremendous damage or even collapse to the real economy. According to international practice, the traditional index of inflation don’t include asset prices because assets are investments rather than consumer goods. This is why our country house prices rose sharply in low inflation in recent years. The relationship between Asset prices and macro economy become an important problem to the monetary policy authorities of every country and a hot topic to the academic circles.The first part of this paper is the theory analysis. This part detail the transmission mechanism of price fluctuations impacting on inflation. The second part introduce the basic condition of the real estate prices and inflation in China using the descriptive statistics method. Then analysis price fluctuations impacting on inflation in different areas using the panel data model. Results show that difference exists in a certain degree between the eastern and western region.The last part summarized the main conclusions of this paper, and put forward policy suggestions. Suggest the policy makers when they are in the relevant decisions, they should give full consideration to its own local characteristics. Suggest macroeconomic policy makers should fully focus on real estate price fluctuations impacting on inflation.