The Research On Relation Between China’s Inflation Expectations And Real Estate Bubbles

Since the21st century, along with the high-speed development of the macro-economy,the real estate market has also undergone a rapid development. The scale of Real estateindustry expands unceasingly in our country, the investment increased year by year, realestate has already become important industry in our national economy. At the same time, thereal estate prices have also reached new highs, seriously affected the normal demand ofhouses in our country,"high prices" real estate bubble problem has increasingly become thefocus of our government and residents. Under the drive of high real estate prices, theconsumer price level is also arising in recent years in our country. At the end of2009, boththe real estate prices and consumer price index expanded. As a kind of high value goods, realestate goods has the attributes of assets and financial assets. Under the influence of the realestate price fluctuations, the residents will expect for the future prices based on the currentreal estate price. Meanwhile, those expectations will also affect real estate prices, and then thereal estate bubble may increase.Based on the previous research, this dissertation estimated the inflation expectations inour country. Different from previous studies is that most expected inflation data are obtainedby using the method of questionnaire method. This dissertation using macroeconomic data forcalculating. At the same time, the dissertation also studied the real estate bubbles. In thisdissertation, the definition of real estate bubble is a kind of price, deviating from the basevalue of real estate. On the basis of previous studies, with the state space model, thisdissertation calculates china‘s real estate bubbles. The results illustrate that eastern provincesand cities have different degrees of bubble level from2008to2013. Overall, east real estatebubble in high volatility, while central were bigger. The developed provinces and cities,including Beijing and Shanghai have higher real estate bubble. In the central regions, such asjiangxi, hunan the real estate bubble showed a trend of rising year by year.The article then analysis the relationship among china’s inflation expectations, realestate bubbles and other macroeconomic variables, such as GDP and personal incomes.Empirical results show that the inflation expectations are Granger causality of real estatebubble; Gross domestic product is also the Granger cause of the housing bubble. Impulseresponse function analyzed the real estate bubble and inflation expectations from the reactionof the gross domestic product (GDP), the money supply shock. At last, according to the results of the analysis, the dissertation make some policysuggestion from the angle of forming correct inflation expectations and control the real estatebubbles.