The Research Of Real Estate Price Fluctuations On The Impact Of China’s Financial Fragility

Many events in the economic history of the world show that the volatility of real estate prices is the important reason for the economic crisis and financial industry Instability, ignoring the real estate price volatility could lead to serious consequences. Even a developed country which have a perfect market economic system still can cause a banking crisis and even serious global financial crisis owing to the unreasonable of the real estate market prices.From the beginning of the housing allocation system,the prosperity and development of the real estate industry led to the construction of infrastructure, the level of housing residents has improved continuously, and our national economy level development rapidly, which has contributed to the miracle of the GDP growth rate more than 10% in 10 years, in recent years, however, too much emphasis on the development of the real estate industry makes the unreasonable rise in real estate prices, especially in east China, the impact of the price fluctuations of real estate on the financial market has gradually become a hot research spot for economists in China.Along with the advancement of interest rate liberalization and financial liberalization, the impact of asset price fluctuations, especially real estate price fluctuations on the banking system and even the whole financial market is growing significantly. In this paper, we study the domestic price fluctuations of real estate on the impact of financial fragility which has both theoretical significance and practical needs.Along with the advancement of interest rate liberalization and financial liberalization, the impact of asset price fluctuations, especially real estate price fluctuations on the banking system and even the whole financial market is growing significantly. In this paper, we study the domestic price fluctuations of real estate on the impact of financial fragility which has both theoretical significance and practical needs.So, on the basis of summarizing the domestic and foreign literature, this paper explores the overall situation of China’s real estate price fluctuations and the connotation of the related theory of financial fragility and explains the transmission mechanism between them.This paper analyzes the impact of real estate price fluctuations on the macro and micro economic factors through the combination of theoretical research and empirical test.In order to measure the the extent of influence about that real estate price fluctuation on financial fragility,this paper uses vector autoregressive model VAR and in the variable selection on innovative changes in the level of real interest rates added to this standard, which makes the model in the dynamic effects of the relationship between the reaction of two aspects are more realistic compared to the previous literature,then use ADF unit root test,Granger causality test and other ways to test.At last, analysising the relationship between the variables in the modelwere by pulse and variance analysis.The results show that there is a causal relationship between the fluctuations of real estate factory price and the financial fragility. The fluctuations of real estate price play an important part in the micro and macro economic indicators,and it is concluded that it’s important for the government macroeconomic regulation to some extent.As the impact effect of analysis.In this paper,we use game analysis to test the subject of financial fragility associated effects of the real estate prices in order to know the in-depth excavation of the connection between the variables.Then through dynamic game model, the introduction of the government’s actions in game model which demonstrates the relationship between the real estate business, individual buyers as well as the banking system and the government.In the final analysis, this article shows how to reduce the financial vulnerability of policy recommendations, real estate price fluctuations can be rational under the supervision of a reasonable expectation to guide government, and enhance our ability to prevent financial fragility.