The Dynamic Impact Of Monetary Policy On House Price

Real estate bubble of Japan and subprime crisis of America have proved that monetary policy would cause the real estate market fluctuations.As we all know that the real estate market downturn will greatly affect the economic development.So we need pay attention to relationships of monetary policy and the real estate.The real estate industry is one of the pillar industries of national economy in China.The stable development of the real estate market is of great significance to China's economic development.Domestic and foreign scholars have shown that the effect of monetary policy on housing price is related to other factors of macroeconomic.At the same time,foreign scholars have found that there is a nonlinear relationships between monetary policy and house price through non-linear model study.But these articles did not take full account of the time-varying characteristics of the coefficients and the role of macroeconomic factors.The purpose of this paper is to study the influence of quantitative monetary policy and price-based monetary policy on housing price with taking full account of the macro environment background of our country's progressive reform.Then this paper will provide policy recommendations for the implementation of monetary policy and the regulation of housing prices.In theory,the quantitative monetary policy affects the supply and demand balance of the real estate market,which leads to the change of equilibrium price.The price-based monetary policy affects the equilibrium price by changing the cost of the supply and demand of the real estate market.From the qualitative analysis of M2?interest rates and housing prices,we can see that M2 and housing prices are positively correlated,interest rates and housing prices are negatively correlated.In this paper,we take a empirical analysis with TVP-FAVAR model,where 71 macroeconomic variables are selected,and two macro factors are extracted by principal factor method.The two macro factors and M2,interest rate and housing price make up an equation,which coefficients have time-varying characteristic.At last,we will analyze five Time point(2001Q3,2006Q3,2008Q4,2011Q1,2014Q4)impulse response function on the monetary policy to housing price,.Based on the empirical analysis,we can make following conclusions:(1)Before the financial crisis,monetary policy cannot effectively curb housing price.(2)After the financial crisis,the mechanism of the effect of the quantitative monetary policy and the price-based monetary policy on the price of the house has changed.(3).After the financial crisis,monetary policy has a stronger impact of house prices,but at the same time in the latter part that impact reverses.(4)Comparing of quantitative monetary policy and price-based monetary policy,we can see that price-based monetary policy has a stronger impulse to housing prise,and that impulse rarely has a time-varying.Finally,based on the empirical results,this paper make the following recommendations:First,the monetary policy should not be directly controlled housing prices;Second,the government need pay attention to housing prices after implementing monetary policy;Third,the government need apply price-based monetary policy instead of quantitative monetary policy;Fourth,Improve financial markets and broaden investment channels.