| As August8,2015,Peoples Bank of China announced that the formation mechanism of the central exchange rate would be adjusted to reference the last closing price of interbank foreign exchange market.It makes that the formation mechanism of exchange rate would become more marketization.In addition,the Federal Reserve carries out the policy of increasing interest rates,while the market react violently and the exchange rate of RMB raise up.On the other hand,government help with the reconstruction of old house by subsidy.The urbanization rate is increasing and excessive liquidity is released.As a result,the house price rose fast again.The exchange rate and the price of real estate arises which accumulate financial risk.In this paper,the transmission mechanism between the exchange rate and the price of real estate was discussed.An equilibrium model was built firstly to find out which factors influence house price.Meanwhile,by analyzing the relationship of the exchange rate and all the variables in the model,the frame including five middle variables which is short term international capital,money-supply,and customer pricing index and credit funds was built.Then the VAR model on the data from January 2006 to December 2016 was set up.The conclusion is that factors on money make the price of estate increasing primarily.Short term international capital and credit funds influence mostly.The credit expansion effect plays important role in the process of exchange rate influence the price of estate.It boosts the demand of real estate as the credit increase 1%while the estate goes to 0.3625%.It will affect housing price both by demand and supply and all depends on where the money flows.In deed the elasticity of credit funds on demand is larger. |
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