A Study On The Relationship Between Real Estate Prices And Inflation In China

It is well known that the economic crisis in 2008 had a profound impact on the global financial and real economy.The review of macroeconomic theory and framework after the crisis also injected new vitality into macroeconomics.During the period of Subprime Crisis,the world’s major economies,asset prices fell sharply in the short term,and huge fluctuations in asset prices also spread to the real economy,resulting in the downturn in price levels and the economy into a full recession in danger.Governments have resumed attaching great importance to the issue of asset price fluctuations.Real estate prices is a representative of asset prices,and the study of the relationship between it and inflation has drawn wide attention from academics and policymakers.On the other hand,inflation and economic growth have always been major topics in macroeconomic research.Maintaining price stability and economic growth are also the goals of China’s macroeconomic regulatory.On the relationship between real estate price fluctuations,inflation and economic growth,many scholars study from different angles.As the economy steps into the new normal and all aspects of the economy are entering a period of structural adjustment,exploring the relationship between real estate price fluctuations,inflation and economic growth in the new situation will help us better understand the current economic situation in our country,change the mode of economic development and achieve steady economic growth.First of all,this paper puts forward the theoretical significance and realistic value of studying real estate price volatility and inflation under the background that real estate prices in our country keep rising and volatility,while prices maintain low growth.Then,this article reviews the domestic and foreign scholars in the study of the issue,and describes the research content and research framework.The second part analyzes the economic theory of the relationship between real estate prices and inflation from the perspective of economics andChina’s reality,revealing the relationship between real estate price fluctuations and inflation.The third part takes the data of the consumer price index,the real estate price index of 70 cities and the actual growth rate of industrial added value from July 2005 to December 2017 as inflation,real estate price fluctuation and economic growth,Through a preliminary analysis of the data,the author studies the general characteristics of the relationship between real estate prices and inflation,and divides the three stages of their relationship.The fourth part studies the dynamic characteristics of the interaction between real estate price volatility and inflation through the establishment of VEC model and VAR model and finds that there is a long-term stable relationship and short-term mutual influence between the two.In the second and the third stages,the steady relationship between the two disappeared.The fifth part based on the theoretical and empirical analysis of the conclusions of the proposed policy recommendations for macroeconomic regulation and control.