Empirical Study On The Impact Of Exchange Rate And Money Supply On The Housing Price

In July 2005, China has reformed her exchange rate system. Since that time the exchange rate has been floating.Under the influence of the new system, the nominal exchange rate of RMB experienced a rapid rise. With the rise in the exchange rate, money supply and housing price also rising substantially. And both of the exchange rate and money supply, housing price had shown a high consistency. Therefore, researching the relationship between exchange rates, money supply and housing price can help to understanding the evolution of housing prices, and provide support for the development of the exchange rate policy and monetary policy.At first, this paper studied the theory of how exchange rate and money supply impacting on price of house. And then picks China’s relevant data from the year 2005 to 2012, by the analysis of econometrics includes the unit root test and co-integration test, Granger causality test, vector error correction model, impulse response to get the demonstration results. The outcome display that in a short period, the exchange rate can lead money supply to the same changing, but the effect of exchange rate on housing price was limited. And money supply can impact housing price in a short period. There exists a long positive affect between exchange rate、money supply and housing sales price. At last, combining the conclusions and actual of China, we recommend the government take appropriate exchange rate policy and monetary policy to control the housing price.