The Theory And Empirical Research On Financial Stability By The Impact Of Chinese Real Estate Price Fluctuation

Due to the continuous improvement of the housing system reform and the rapid economic growth, the rapid development of Chinese real estate was shown the different trend among other industries.First of all, the government played an important role in the initial stage of the real estate industry chain with the impact of “land finance”, resulting in a high degree of monopoly in land market. Secondly, due to the simplification of financing channel, credit Loan of commercial bank is the most important funds source in industry chain of real estate, which would produce a large number of bad debts to threat financial stability if the real estate prices fall. Third, market speculation phenomenon of the real estate investment is serious for the huge profit space and rigid needed of real estate, which greatly contributed to the accumulation of risk of financial instability. Finally, Chinese real estate industry had a great influence of Chinese national economy by great relevance with upstream industry, downstream industry and supporting industry.Based on the background, firstly, this paper focused on the relationship between the increase of Chinese real estate prices and the macro economy, and how to form government fiscal revenue. The interdependent relationships are analyzed in theory between real estate industry and commercial bank credit to affect the mechanism of financial stability is formed if the stimulating investment in the real estate market speculation.Secondly,this paper used cases study to analysis the influence of real estate price fluctuation to financial stability on theory. Combined with the IMF financial robustness of the proposed index system, domestic and foreign research results, and China’s national conditions, this article constructs the index system of financial stability. Using the method of principal component analysis to get the comprehensive evaluation index of the financial stability in 1987 to 2014 after building a comprehensive evaluation system for financial stability, and then the paper analyzed the long-term effects of real estate price fluctuations on comprehensive evaluation index of Chinese financial stability by using the Cointegration test on the basis of vector autoregressive model vector auto regression model(VAR), at last error correction model was used to test effects of real estate price fluctuations on comprehensive evaluation index of Chinese financial stability on short-term. The results shown, the real estate price fluctuations were a weak positive effect in the short term and a significant negative effect in the long term to financial stability. While, short-term positive effect eventually come up to significant long-term negative influence by a reverse revision mechanism of error correction model. Finally reveals the effect of impulse response of a dynamic process.In the last part of the paper made a summary of content, pointed out the shortages of the study and proposed the expectation. The conclusion provided the theory of the purchase of consumer behavior. For another, the conclusion can provide reference for adjusting the real estate land of government policies,transformation-upgrading of real estate enterprise,and real estate credit management of commercial bank to achieve financial stability ultimately.